Russia's Glide Bombs Depend on Imported Components (TDR, 2 May 2024)

THE DEKLEPTOCRACY REPORT

May 2, 2024

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BOTTOM LINE UP FRONT

Welcome to our ninth issue of 2024! This week we look at an important report by Ukraine’s Trap Aggressor, the reporting arm of Kyiv’s State Watch think tank, about foreign components found in Russia’s glide bombs. In many ways glide bombs are an ideal technology for Russia as they marry “dumb” high-explosive bombs with modules that allow them to glide and change course. The result is a guided, stand-off munition that Russian aircraft can “drop and forget,” getting out of the way of Ukrainian anti-aircraft weapons. Despite Russian attempts to obscure the components, Trap Aggressor’s investigation was able to trace dozens of parts. Their findings should provide agencies in the US, Europe and Japan with a roadmap for disrupting this trade. We’d like to thank Trap Aggressor for bringing their important reporting to our attention.

In the Digest, we review the Center for Strategic and International Studies (CSIS)’s landmark (and now annual) report on the impact of sanctions on the Russian war machine. While Russia’s manifest weaknesses remain evident, the report also outlines how Russia has been able to bypass the sanctions regime – both using front companies and the cover of civilian production – on a scale that has allowed it not only to stay in the battlefield but go on the offensive in recent months (a factor also attributable to Western fecklessness). We also look into the “Baltic Jammer,” Russia’s use of electronic warfare that has disrupted civilian use of GPS-based systems in a busy air corridor, risking a serious incident.

In Qui Custodiet, we look at the Biden administration’s attempt to balance its support for Israel with legal requirements and political pressure to sanction a specific Israeli military unit linked to alleged human rights abuses. We also explore a largely overlooked detail in the National Security Supplemental (yes, the bill that provided aid to Ukraine, Israel and Taiwan), signed into law by President Biden on April 24, that contains language that doubles the statute of limitations for sanctions violations to ten years. In Around the World, we see how European banks have upped both taxes paid and profits in Russia, raising the familiar question of when, if ever, entities like RBI and Unicredit will exit the market. We also look at exclusive reporting by Reuters of a UN investigation that determined that a North Korean ballistic missile was used in Kharkiv at the beginning of the year. And we look at a story this week in the Insider that chronicles how Soviet-born, Czech citizens facilitated the work of a notorious Russian military intelligence sabotage unit, including the 2014 bombing of ammunition storage facilities that killed two people. 

RUSSIA’S GLIDE BOMBS DEPEND ON IMPORTED COMPONENTS

For anyone who has observed the war over the past 26 months, it will come as no surprise that one of Russia’s deadliest weapons, glide bombs, depends on imported components. Still, this reliance, as demonstrated in an important investigation by Trap Aggressor, the media arm of Kyiv’s State Watch think tank, underlines that Ukraine’s Western allies have once again failed to prevent the Russian war machine from obtaining components for critical weapons systems, including parts made by American, Swiss and Japanese companies. The results of this failure can be seen in the ruins of Avdiivka, a city Ukraine had defended for a decade. 

Glide bombs – Soviet-era high-explosive bombs (known by their Russian designation as FABs or the cluster version as FBKs) fitted with unified gliding and correction modules (UPMKs) that allow them to be used as guided munitions from a distance up to 60 kilometers – have proven critical in Russia’s scorched earth campaign this year as they seek to advance from Avdiivka towards the cities of Kramatorsk and Sloviansk in Donetsk region. They are devastating battlefield weapons. With limited Ukrainian countermeasures available, they allow Russian forces to destroy Ukrainian military front-line positions, command posts, and supply depots. Combined with Russian artillery superiority, heavy employment of glide bombs at the front has been a key enabling factor for recent Russian advances. Earlier in April, the Ukrainian government estimated that Russia was dropping 500 of these bombs each month. Their growing use reflected months of Western failure to resupply air defenses (let alone deliver F-16s), allowing Russian aircraft to operate closer to the battlefield.

According to Trap Aggressor, a major manufacturer of FABs and UPMKs is Russia’s sanctioned Scientific Production Enterprise (NPO) Bazalt JSC, a Moscow-headquartered company that is part of the sprawling Rostec defense holding and a key munitions plant. It was reported last year to be producing around 500 UPMKs per month. Another major producer of UPMKs is State Scientific Production Enterprise (GNPP) Region JSC, located outside of Moscow. It is another large and sanctioned military producer and part of the Tactical Missile Corporation. The report lists another 15 organizations that are critical to the glide-bomb supply chain. A comparison of these company names with Dow Jones’ Risk Database finds that most are sanctioned by the US, but a few are not, already a notable gap in the sanctions regime. 

Household names

The investigation found that “a number of key electronic elements in the guided bombs were imported to Russia via China, Thailand and Turkey.” The reporters were able to gain access to the components of a UFAB-500M62 with a UPMK unit, although they noted that the Russians had removed or put varnish on the labeling of components to obscure the brand and origin of the parts.

Still, the researchers from Trap Aggressor were able to identify parts that were manufactured in the US. One was a buffer made by Texas Instruments, another a transceiver from Maxim Integrated and quartz from CTS Corporation. And it reported that microchips from the RS-232 driver manufactured by Sipex Corporation (USA) and RS-845/RS-422 protocol converters manufactured by Analog Devices (USA) have been used in the manufacturing of the UMPK. There is no suggestion that the companies wittingly supplied the parts to Russia, and, as noted above, the investigation found that they came from suppliers in China, Thailand, and Turkey. 

Other components from countries with Russian sanctions programs in place included a medium voltage relay from AXICOM – TE Connectivity in Switzerland, a microcontroller produced by Switzerland’s STMicroelectronics and a metal-oxide-semiconductor field-effect transistor (MOSFET) made by Japan’s Din-Tek. Other components were traced to several Chinese companies. Again, there is no indication the companies were aware that their parts were supplied to sanctioned companies.

Notably, the Kometa-M adaptive antenna array system used in the UPMK is manufactured by sanctioned Russian company VNIIR-Progress based in Chuvash Republic. Trap Aggressor has previously reported that Russian-manufactured Shahed drones use Kometa-M technology. Molfar, another OSINT research group, has chronicled the development of Kometa-M since 2008 and its use on several weapons platforms. Both groups have suggested that the company may remain linked to a high-profile, pro-Russian Serbian businessman, Nenad Popovic, the leader of the Serbian People’s Party and a new member of the Serbian government, a very rare and eyebrow-raising example of a foreign national involved in the ownership of a strategic, defense-related Russian company. Notably, according to Trap Aggressor, VNIIR-Progress has imported gear from Turkey and China.

Standing off

Unlike boondoggles like the Kinzhal hypersonic missile, which has fallen victim to Patriot batteries, or the T-14 Armata tank, which has barely made it to the battlefield at all, glide bombs are “a perfect fit for the Russian way of war,” according to defense analyst Michael Peckwriting recently for the Center for European Policy Analysis (CEPA). Despite Russia’s abject failure to establish air supremacy over Ukraine, they can be released out of range of most Ukrainian air defense weapons, are self-guided, and are relatively small, making them very hard to shoot down. And they make use of Russia’s large stockpiles of FABs and FBKs that can deliver between 500 kilograms and 1.5 tons of explosives.

From a military perspective, as Peck notes, the West can help by ensuring the roughly 60 F-16s pledged to Ukraine – and, crucially, training for their crews – make it without further delay, along with longer-range air defense missiles, including the Patriot and the Franco-Italian SAMP/T. The goal of both moves is to push Russian aircraft further back over their territory to prevent them from launching glide bombs to support their now advancing troops, especially in western Donetsk region. Russia has increased the use of the weapons 16-fold compared to 2023, according to reports, suggesting that restored supplies of Western air defense weapons could slow their use. 

The US and its allies also need to make an urgent study of the supply chain for UPMK and Kometa-M, focusing on the reported supply chains using China, Thailand and Turkey. As with drones, we can expect to see a network of unsanctioned Russian companies acquiring technology from abroad on behalf of sanctioned defense contractors. The US can use specific powers to go after the banks that make these transactions possible under Executive Order 14114, signed at the end of 2023. Arguably, China should be a special focus given both the scale of that country’s trade with Russia in these materials, and US leverage, given the desire of Chinese banks to retain access to global banking markets. That Russia conceals the brand and presumably the serial numbers of components underlines their understanding of their vulnerability, and that of their suppliers, to a strict interdiction effort. By prioritizing the investigation of the glide bomb supply chain, building on the work of Trap Aggressor and others, Ukraine’s allies can act to delay and limit the production of UPMK kits, giving Ukraine time to field practical countermeasures to blunt their efficacy in the field. An urgent response to glide bombs is critical until the Ukrainian armed forces are able to use fresh arms supplies to change facts on the ground. 

Moscow scrambles to keep the war machine turning over

In April 2023, the Center of Strategic and International Studies (CSIS) headlined their report on the impact of sanctions on the Russian military and industrial base “Out of Stock?” The analysis emphasized that Russia’s defense sector, reliant on foreign components, faced significant strains in overcoming battlefield losses. A year later, it is telling that CSIS called their follow-up report “Back in Stock?” The shift reflects the very different reality following the second half of 2023 and the early months of this year. As the authors note: “This analysis shows that Russia remains dependent on foreign components and technology but has shifted its procurement patterns, with more military goods flowing into Russia now being sourced from civilian or dual-use suppliers. The report also demonstrates the depth and breadth of China’s support for Russia’s war effort....”

The lesson for Ukraine’s allies is that Russia has been able to bypass the sanctions regime – both using front companies and the cover of civilian production – on a scale that has allowed it maintain three-shift military production at its defense plants. Part of this is the sheer resources thrown at the problem. This year, Russia is expected to spend around 6% of GDP on the military, with defense spending up more than a third to around US$350 billion. And as the CSIS report chronicles, Russia is straining to keep up the pace – weapons stockpiles built up over decades are being depleted, domestic ammunition production has fallen short (the gap covered by imports), many defense plants are in bad financial shape, labor shortages are acute, import substitution efforts often fail, the industry is overly reliant on Chinese imports and corruption pervades the sector, seen most recently in the corruption prosecution of a deputy defense minister who lived in almost comical splendor. 

CSIS’s recommendations reflect urgent priorities that the US and Europe, by and large, are failing to live up to. Recent weeks have finally seen movement to fund Ukraine’s military after months of resource starvation, and CSIS makes the point that the pace of supplies must exceed Russia’s production rate. They also call for a broader move on oil, to enforce the price cap, which Western insurers say is currently unenforceable, and increased production by Saudi Arabia and other producers. There’s another urgent reminder to Europe to boost defense production and an important reminder that Ukraine’s allies need to engage with the Global South, where Russia’s narrative has dominated throughout the war. Finally, there is a call to close sanctions loopholes and enforce export controls. We note that the US and its allies have almost entirely relied on passive rather than active enforcement, which is a significant reason Russia is still in the fight. While the US has sanctioned Chinese companies, America has not leveraged its far larger trade relationship with China to force it to scale back its supply of the Russian war machine. Moreover, there has not been a single high-profile enforcement action against a large Western company for violations since the beginning of the war. Why do so many Western components still end up in Russian glide bombs and drones? Partly, it is the actions of third-country suppliers. But as we’ve seen with CNCs or Western companies supplying Russia’s Arctic LNG-2 project, companies know the risk of discovery and, crucially, enforcement is far lower than the assurance of profits. 

Act of War: The Baltic Jammer

The reports have been coming in since February 2022. Interference in the global positioning system (GPS) and aircraft global navigation satellite systems (GNSS, GPS augmented by data such as GALILEO) has affected thousands of aircraft operating in airspace over the Baltic Sea. In a widely reported episode in late March, more than 1,600 aircraft were impacted in the region in a period of just under 48 hours. This week, Finnair suspended flights to Tartu, Estonia’s second-largest city, for a month “until alternative solutions have been established,” according to the airline. Unlike many other airports in the region, Tartu’s relies on a GPS landing system. The Estonian foreign minister called the jamming – linked by several reports to the Baltic exclave of Kaliningrad – a Russian “hybrid attack” and said the matter would be raised with NATO and the European Union. 

European officials told the Economist this week that the jamming may be a Russian attempt to protect its facilities from Ukrainian drone attacks and suggested the source of the signals was closer to St. Petersburg. Looking at a map and the convoluted route through international airspace Russian aircraft have to take to Kaliningrad, as they are banned from the airspace of surrounding countries, it is hard not to see these tactics as pique. Whatever the case, the Russian actions raise the risk of a serious incident. At a minimum, the disruption forces air traffic controllers to space aircraft more widely and airports to abandon GPS landing systems. Lithuania’s foreign minister was blunt: “If someone turns off your headlights while you’re driving at night, it gets dangerous.” While European Union officials have yet to act, the disquiet of Baltic officials is understandable. Hypotheticals such as a crash of an airliner registered in a NATO state in the region (far more likely now after Finland and Sweden’s NATO’s accession in 2023) amid a jamming incident – where the actual cause could take weeks or months to determine – should keep officials awake at night. Russia owes its neighbors an explanation. It is unlikely to offer one.

US hits shipping companies, Arctic-LNG suppliers with sanctions

On May 1, as this newsletter was being finalized, the US Department of the Treasury and State Department announced more than 300 new sanctions targeting Chinese companies that support Russia’s war machine, companies in Russia’s propellants sector, and shipping companies that have continued to support Russia’s Arctic LNG-2 project, among others. Notably, around 60 companies were targeted for facilitating Russia’s “sanctions evasion, circumvention and backfill.” The intent of the latest round is clear, with Treasury headlining its announcement as “US Continues to Degrade Russia’s Military-Industrial Base and Target Third-Country Support.” Beyond Russian companies, more than a dozen Chinese companies are named. As the New York Times noted, the sanctions follow Treasury Secretary Janet Yellen’s April visit to China, where she reportedly warned officials that Chinese companies and banks doing business with Russia’s military industry would face consequences. In addition, the sanctions target companies in Azerbaijan, Belgium, Turkey and the UAE. Notably, the latest sanctions include Russian importers of cotton cellulose, an essential precursor for explosives production that is almost exclusively sourced from Kazakhstan and Uzbekistan. Another important step was the Department of State’s sanctioning of Singapore-based shipper Red Box Energy Services, which transported crucial components for the Artic LNG-2 project, as reported previously. The company’s CEO had very publicly challenged the notion the company was violating sanctions in interviews with High North News, and the Financial Times. State also targeted Hong Kong-based CFU Shipping, the operator of Hunter Star, the vessel that recently delivered a large component for Artic LNG-2, as reported in our previous newsletter. A large Russian Arctic shipper and its vessels were also listed. The additional moves against Arctic LNG-2 are positive steps, in line with recommendations recently made by Ukrainian civil society group Razom We Stand, although still short, for example, of imposing sanctions on all tankers used to transport Russian LNG. 

US weighs sanctions on Israeli unit accused of human rights violations

You don’t often hear about the US considering sanctions on an ally. So, the April 20 news that the US was considering sanctions against Netzah Yehuda, a special ultra-orthodox Israeli Defense Forces battalion (reportedly including many right-wing extremist settlers) that had previously operated in the West Bank, sparked a week of intense speculation. The sanctions would apply the 1997 US Leahy Law, which prohibits US support to foreign units suspected of human rights violations. Ultimately, although the State Department found that Netzah Yehuda – and four other IDF battalions which had been under investigation for incidents in the West Bank before the current Gaza war – had indeed violated human rights, they will continue to receive US aid. While this episode may amount to a proverbial bullet dodged for Netzah Yehuda, it is also a shot across the bow of Israeli Prime Minister Benjamin Netanyahu’s government, following previous sanctions designations against West Bank settlers in February, March and April. President Biden has so far resisted calls to suspend arms sales to Israel and signed the Israel supplemental bill and its US$26 billion of (mostly) military aid into law on April 24th. However, seven months into Israel’s assault on Gaza in the wake of the October 7 massacres by Hamas, with a worsening humanitarian emergency in the Strip, accusations of significant international humanitarian law violations by the Israel Defense Forces, genocide allegations against Israel at the International Court of Justice, and reports that the International Criminal Court might issue criminal warrants for Israeli leaders, pressure is mounting on the Biden Administration to act. With the US facing disquiet among some key Democratic voter groups (and louder campus unrest) and under pressure to bring the democracies of the global south on side in its clash with Russia, the Leahy Law and other targeted sanctions measures could be a critical tool for protecting America’s reputation at home and abroad by restraining the actual or perceived excesses of its allies.  

Alongside arms for Ukraine, teeth for sanctions enforcement in supplemental

Military assistance for Ukraine, Israel, and Taiwan was the headline but not the only thing of note in the supplemental bill passed by Congress last week. As reported by the Wall Street Journal, the National Security Supplemental, signed into law by President Biden on April 24, contains language that doubles the statute of limitations for sanctions violations, giving regulators ten years to investigate potential offenses under the International Emergency Economic Powers Act (IEEPA) and Trading With the Enemy Act (TWEA). The change will put additional pressure on companies and individuals, especially in the US, to ensure compliance. While it barely made the news, the sanctions-related language in the supplemental is an important step. It is the latest in a series of moves in recent months that provide more teeth to US economic authorities, especially December’s Executive Order 11414. While sanctions have traditionally been seen as a coercive political tool, a review of OFAC designations over the past year – which have frequently targeted Russian procurement networks – indicates that the US Government is increasingly embracing sanctions as a weapon for degrading enemy capabilities (see Digest, above). However, while additional powers are helpful, capacity limitations appear to be an issue; while independent open source investigations routinely identify dozens of unsanctioned entities engaged in violations, the US Treasury only adds at most a few hundred Russia-related entries to the Specially Designated Nationals list each month, giving sanctions-evasion networks ample time to adapt and reconstitute. The supplemental is a positive development by putting more of a regulatory burden on companies. But, it should not stop policymakers from seriously considering the resources available to enforcement agencies and what can be done to enhance them. With appropriations deadlines nearing, there is no time to waste. 

European banks report increasing profits, up tax payments in Russia

Western banks paid EUR800 million (US$854 million) in taxes to the Russian government in 2023, the Financial Times reported last week. According to the report, the seven top European banks by assets in Russia — Raiffeisen Bank International (RBI), UniCredit, ING, Commerzbank, Deutsche Bank, Intesa Sanpaolo and OTP — reported combined profits of more than €3bn in 2023. The reported profits were about three times the level of 2021, the year before the full-scale invasion and large-scale sanctions, and again raise questions about the motivations of institutions like RBI. As previously reported, the bank – which accounted for half of the reported profits of top European banks last year – has told European and US regulators that it plans to scale-down its presence in Russia. Notably, Deutsche Bank, Hungary’s OTP and Commerzbank have previously reduced their presence in Russia, while Intesa is reportedly seeking to sell its Russian business. In any case, whether they are enthusiastic or claiming to be stuck due to challenges repatriating funds and selling assets in the current environment, the banks continue to provide a non-trivial financial contribution to the Russian economy in wartime, while their presence lends experience and credibility to the domestic banking sector.

UN identifies North Korean missile used in Ukraine strike

For the first time, experts from the United Nations (UN) have identified the use of a North Korean ballistic missile in Ukraine, according to an exclusive report by Reuters. The finding indicates Russia’s acquisition of the weapon has violated a 2006 UN embargo, Resolution 1708, imposed on North Korea, an embargo that it voted for as a member of the UN Security Council. The monitors inspected debris and identified a Hwasong-11 series ballistic missile that was used in an attack on Kharkiv on January 2, 2024. Notably, the monitors said that they “could not independently identify from where the missile was launched, nor by whom," although it would strain credibility that it was anyone but the Russians. The UN finding is unlikely to have any immediate effect on either Russia or North Korea. However, it underlines Russia’s apparent willingness to violate potentially every pact it has signed since the dissolution of the Soviet Union, including the Budapest Memorandum on Security Assurances and the Minsk agreements meant to regulate the situation in Ukraine before the full-scale invasion. Given the reported scale of North Korea’s deliveries of munitions – in exchange for Russian oil – it has to be assumed that this violation is just one of many hundreds if not thousands. The willful disdain shown towards the UN arms embargo to which it is a signatory makes clear how much of a pariah state Russia has become in its obsessive mission to dominate and destroy its neighbor. 

Czech illegals unmasked

The reporting team of The Insider, led by Michael Weiss, Roman Dobrokhotov and Christo Grozev, has a habit of producing stories that are both more shocking and weirder than fiction. Their revelation this week in a story done in collaboration with Greece’s Inside Story is that the notorious sabotage and terrorism Unit 29115 of Russian Military Intelligence (GRU) had two Soviet-born Czech citizens, Elena and Nikolai Šapošnikov, acting as deep cover agents who aided a spectacular act of terrorism against Czech government weapons and ammunition depots that killed two people, while also running a safe house in Greece. This week, the Czech Intelligence Center for Counter-Terrorism and Organized Crime released the findings of a years-long investigation into Unit 29155’s role in the 2014 attacks in Vrbětice. It linked the attacks to known operatives Alexander Mishkin and Anatoly Chepiga, figures made famous in the deadly Salisbury poisonings in the UK in 2018, when they claimed in a surreal interview with Russian propaganda network RT that they were only in town to see the local cathedral. In the Czech case, the couple provided the agents access to the warehouses in Vrbětice. The Czech investigation and The Insider’s reporting found the Šapošnikovs work “ranged from intelligence-gathering to logistical facilitation, providing safe havens, recruitment efforts, and even aiding in securing physical access for GRU operatives conducting sabotage missions.” The episode is a sobering one and underlines that Russian espionage networks are not just collecting information on adversaries but, as Unit 29155’s sordid and now public history attests, murder whoever gets in their way. This can be attested to by the families of the two victims of the 2014 blasts or Dawn Sturgess, a victim of collateral damage in the 2018 Salisbury attacks. Notably, Bulgarian officials have been investigating a series of blasts at local plants and storage facilities. Both Czechia and Bulgaria are key suppliers of arms and munitions in Ukraine. It is hard to imagine a higher priority than rolling up Russian networks before more innocent lives are lost.