Study: Russia's top arms maker dodges sanctions through 482 subsidiaries

A new analysis by the organization NAKO has found that Russia's largest weapons manufacturer, Rostec, is able to circumvent Western restrictions through an extensive network of subsidiary companies.

482 companies under one roof

The research identified 482 separate companies operating within the Rostec conglomerate. The European Union has had Rostec under sanctions since 2022, but the new findings show these restrictions actually cover only a small share of all the entities belonging to the group.

How the restrictions are being sidestepped

Because most of Rostec's subsidiaries are not formally listed under sanctions, the conglomerate and its affiliated companies continue to obtain components manufactured in the West, including microelectronics. According to NAKO, this incomplete sanctions coverage is precisely what allows Russia to secure the parts needed to produce drones and missiles.

Context

Rostec is a central pillar of Russia's military-industrial complex, and its output is also used in the war against Ukraine. Since their introduction, the sanctions have aimed to limit Russia's access to technologies and components required for weapons production, but the sprawling subsidiary network appears to be one of the main routes used to get around those limits.