Procurement: Supercharged Sanctions

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May 25, 2022: Since the start of the war in Ukraine, Ukrainian and Western munitions experts have examined debris from Russian guided munitions, especially the Kalibr cruise missile, Iskander SRBM (short range ballistic missile, 300mm guided rockets (similar to the U.S. GMLRS), SAMs (surface to air missiles), military radios and any Russian gear that might use Western components. The investigation was to compile a list of key Western components, usually electronic, used in such equipment. Many of these components are dual-use (civilian as well as military) and the list is being expanded to include possible substitute items available in the West or China. While China has not joined any sanctions program against Russia, similar sanctions can be imposed on China if they are found to be supplying Russia with banned Western components that were purchased for use in Chinese equipment, China’s tech exports will also be scrutinized.

There are already reports from Russia that efforts to replace the guided rockets and missiles are running into trouble because key components come from the West. These guided munitions are used in most air attacks in Ukraine because the Russian air force could not gain air superiority. Making it more difficult to replenish the Russian stockpile of these weapons is seen as a key element in weakening Russian resolve and ability to fight on. China will also feel the heat from this new approach to sanctions.

Before 2014 China was dependent on Ukraine for some components and that was a problem. In 2021 Ukraine decided to end Chinese majority ownership of Motor Sich, a major and profitable Ukrainian defense manufacturer. The government, in effect, nationalized Motor Sich. While this annoyed China, it also pleased the United States, a major ally and supporter of Ukraine in its fight against Russian invaders after 2014. The Americans had already sanctioned the Chinese firms that were buying a majority interest in Motor Sich. The Americans feared that control of Motor Sich would enable China to solve its problems with developing and manufacturing high-performance gas turbine engines for helicopters and ships. Back in 2019 China went forward with its efforts to buy this majority stake. Many Ukrainians felt China would take advantage of the corrupt government and industry officials associated with firms like Motor Sich to get better deals. These were often at the expense of Ukraine but very lucrative for the corrupt Ukrainians involved. Many Ukrainians, and Americans, realized how China operated in deals like this. If China obtained a major, or majority, stake in Motor Sich they could, and probably would, steal all the technology and manufacturing secrets and eventually move Motor Sich production to China. Initially they would hire some Ukrainian tech experts to help the Chinese manufacturing operation to get up to speed, but eventually Motor Sich in Ukraine would become a branch of the main operation in China. Eventually the Ukrainian branch would be renamed to something Chinese and “Motor Sich” would disappear. Most Ukrainians want to keep Motor Sich Ukrainian and not plundered of all its tech by the Chinese.

The Americans had been waging a trade war with China since 2018 and one of the issues was Chinese theft of IP (Intellectual Property). President Zelensky of Ukraine, newly elected and facing major IP threats from China, sees the Americans as the ideal partner in the Ukrainian effort to fend off the Chinese. As if to confirm what China was up to, Sohu.Com, a Chinese media outlet, recently published an article called “Thank you Ukraine.” This story literally thanked Ukraine for helping Chinese military technology to advance so quickly by making available much Soviet era military tech at low prices and with few restrictions. To its Chinese audience (the article was only published in Chinese) the article made a lot of sense. When Ukrainians got translations of the article the reaction was less complimentary. As the Americans are also interested in how China obtains military tech, it is not surprising that Zelensky has found the Americans interested in assisting him in dealing with the Chinese threat as well as corruption facilitated by Americans.

A political newcomer, Volodymyr Zelensky, was elected president of Ukraine in 2019 by a large margin. Since taking power at the end of May, Zelensky quickly replaced many notoriously corrupt or incompetent government and military officials. Then he proposed new efforts to end the five-year-old war in two eastern provinces (the Donbas) by agreeing to hold elections in Russian occupied portions of Donbas to determine what happens. That means voters could choose to remain part of Ukraine or become an autonomous area. Either way, this would end the war. Zelensky insisted that all Russian troops or mercenaries be withdrawn before the vote is held. This was vital to avoid voter intimidation. Many Ukrainians believe you can’t trust the Russians and that the Russians will find a way to cheat. Based on past Russian performance, that’s a reasonable criticism because Russia refused to consider the Ukrainian proposal.

Russia was disappointed at the Chinese failure to acquire Motor Sich. Until 2014 Russia was dependent on Motor Sich (and other Ukrainian firms) for some key aircraft and industrial components. As long as Russia is occupying Crimea and parts of Donbas those business relationships are blocked and Russia has not been successful in creating adequate Russian suppliers.

In 2014 there were many Ukrainian-made guidance systems used in Russian air-to-air missiles. This includes the infrared (heat seeking) guidance systems for short-range R-73 and medium-range R-27T. These missiles are the main armament for MiG-29, Su-27, Su-30 and Su-35 fighters.

Su-27/30 aircraft contain a lot of Ukrainian components (hydraulic systems, electrical and electronic systems) as well as braking parachutes. Those components are also produced in Russia but not enough of them to meet the current needs. This dependence on Ukrainian components has an impact on Russian warplane exports. Some of the existing export deals will be seriously jeopardized without Ukrainian components. If the Russians lose access to Ukrainian production their only choice would be to delay deliveries to the Russian air force in order to service the signed export contracts.

After 2014 Russia quickly felt the effects of being cut off from their Ukrainian defense suppliers. Although they seized over a dozen factories in Crimea, including three large shipyards, it’s still not enough for their needs. Without cooperation from Ukrainian suppliers, Russian military modernization and export plans are in big trouble. The situation is so desperate that the Russians are considering buying the needed components from China, which has long been manufacturing illegal (unauthorized) copies of these items for the illegal copies of Russian aircraft and missiles they also build.

One of the most important Ukrainian aviation suppliers is Motor Sich, which produces many of the new engines (and modernizes old ones) for the Mi-8/17 transport helicopters and Ka-50/52, Mi-28 and Mi-24/35 attack helicopters. Despite considerable effort, Russian industry has been not able to produce sufficient helicopter engines for planned aircraft production. Without Ukrainian engines Russia, will be unable to produce the number of new helicopters for both their own forces and export orders. They will also be unable to refurbish enough older engines to keep existing helicopters operational.

Another area where Russians have troubles is military shipbuilding. Russia simply lacks construction facilities so their shipbuilders alone cannot carry out the ambitious plans for replacing all the aging Cold War era ships with new designs. Meanwhile, Ukraine has three shipyards in Mykolayiv along with more yards in Kherson, Kerch and Sevastopol. The last two have already been seized by Russia, something Ukraine is very angry about.

In Mykolayiv, there is also Zorya-Mashproekt, the largest firm designing and manufacturing gas turbine engines for Russian existing and planned warships. Their engines are used on a majority of the ships of the Russian Navy’s ships. Russia has failed to organize domestic production of such gas turbines so the reliability of its fleet is threatened.

A lot of Russian combat vehicles are using Ukrainian components for fire control, laser warning and other complex electronic and optical systems. Even if the Russian industry has alternative sources, getting them up to speed will take time.

After 2022 it was discovered that France and Germany had supplied many of the components Ukraine no longer exported to Russia. France and Germany explained that they believed these items were dual-use but their governments did not have a system for detecting deception. Attention was paid to similar Iranian efforts to buy dual-use items and European firms will accept enforcement if their government presents the evidence. The new post-2022 list will work if all NATO nations cooperate.

 


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