Hungarian Company Aids Russian Arms Makers in Evading Sanctions

The Hungarian company Milspace Kft is helping Russian Helicopters to sign contracts for the repair of foreign helicopters to circumvent sanctions.

This is stated in documents obtained by researchers of the InformNapalm project.

An official letter from the Hungarian company Milspace Kft to the Mexican company Personas y Paquetes Por Aire, S.A. de C.V. outlines a clear scheme for circumventing sanctions against the Russian military-industrial complex.

In the document, Milspace explicitly admits that helicopter repairs at the Russian “plant in Kazan” are impossible, as Russian companies and the Mil Design Bureau are under sanctions because of the war in Ukraine.

But at the same time, it offers a ready-made “gray” scheme that allows to conclude a contract bypassing international sanctions:

• Milspace Kft acts as a formal contractor;
• Repairs are carried out at a plant in Kazakhstan licensed by the Russian Mil Design Bureau;
• Spare parts come from Moscow – from Mi-INTER Ltd;
• All work is coordinated with Mil Design Bureau and Russian Helicopters, which are part of the Rostec state corporation.

The Hungarian company has announced its readiness to send a team to diagnose and assess the condition of the helicopters under a separate contract worth $92,000.

InformNapalm believes that Viktor Orban’s government is directly involved in the sanctions circumvention scheme, since although Milspace Kft is a private company, such defense deals are not conducted without close coordination with government agencies, especially in NATO countries.

“If the company has access to the documentation of the Russian Mil design bureau, cooperates with factories in Kazakhstan and provides logistics of spare parts from Moscow, this may indicate either informal assistance of the Hungarian state or at least indifference of the Orban government to the activities of its defense companies in the interests of the Russian Federation.

In addition, Viktor Orban’s government has repeatedly demonstrated loyalty to Russia, slowed down sanctions decisions in the EU, and blocked military assistance to Ukraine through NATO and EU mechanisms. Therefore, even the formally private participation of Milspace Kft de facto fits into Budapest’s geopolitical line, which is contrary to the interests of the EU and NATO,” the project researchers note.

Despite its formal affiliation with the European Union and the North Atlantic Alliance, Hungary, through its companies, is actually contributing to the circumvention of the sanctions regime by helping Russia.

The mechanism for circumventing sanctions proposed above is typical and resembles the scheme previously organized by Russian companies to service fighter jets in Kazakhstan using French equipment from Thales and Safran.

In 2024, a Kazakh company signed a contract with French defense companies to service displays and collimator indicators on Kazakh Su-30SM fighters. However, the actual recipients of the services were Russian aircraft.