Russian manufacturers bypass U.S. sanctions and, due to intermediaries, buy electronics for the production of Orlan-10 reconnaissance drones.

Reuters news agency, Russian ‘Vazhnye Istorii’ media and experts from the Royal United Services Institute have established a network of intermediaries who implement the request of the Russian Federation for the necessary components.

The investigators examined customs and banking documents to find out exactly how the Special Technology Centre (STC) company, which manufactures Orlan-10 UAV, gets the necessary components.

At the same time, the STC has been under sanctions since 2016. And in 2017, the United States identified this company as a part of Russian intelligence and banned any significant agreements with it.

In March 2022, U.S. restrictions tightened, effectively blocking all sales to Russia of high-tech goods such as microchips, communication and navigation equipment.

At the same time, the production of drones did not stop.

Hong Kong company

The documents show that one of the most important STC suppliers is the Hong Kong-based Asia Pacific Links Ltd.

It supplied export goods to the Russian Federation through the importer company SMT iLogic, which had the same registration address as the Special Technology Center. The company also had employees of the STC as its shareholders.

Anton Trofimov is the Asia Pacific Links Ltd owner and a Russian expat living in Toronto. Journalists didn’t succeed in getting the company’s comment, or visiting its office in Hong Kong.

According to the documents, Asia Pacific Links Ltd is booming this year – exporting $5.2 million worth of products from March 1 to September 30, up from $2.3 million during the same period in 2021.

Customs documents indicate that the goods that Asia Pacific Links Ltd supplied to SMT iLogic were manufactured by the U.S. technology companies.

Spare parts sent by Asia Pacific to iLogic in the same period of 2022 included $1.8 million of chips made by Analog Devices, $641,000 made by Texas Instruments, and $238,000 — by Xilinx.

The supplies also included model aircraft engines made by a Japanese company, Saito Seisakusho, that are used in the Orlan 10.

The companies assured journalists they don’t do business with the Russian Federation and require official distributors to find out the final recipient of goods.

Activities of SMT-iLogic

The documents studied by the investigators indicate that SMT-iLogic is the largest prominent supplier for the Special Technology Center.

Since 2017, SMT-iLogic has imported approximately $70 million worth of electronics to the Russian Federation. Almost 80% of the company’s activities are from the STC.

The materials studied also indicated that the shareholders of SMT-iLogic are either STC employees or their relatives, who either do not know anything about the company’s activities or “remember something” about its existence.

IK Tech

Another company that sold goods to SMT-iLogic is IK Tech. It was founded by Igor Kazhdan, also known as Alex Stanton, who holds Russian and American citizenship.

From 2018 to 2021, IK Tech sold about $2.2 million worth of electronics to Russia. Customs documents indicate that more than 90% was sold to SMT-iLogic.

From October 2020 to October 2021, IK Tech delivered more than a thousand GUM3703FEBY processor modules that were found in Russian Orlan UAVs.

In February, two weeks before the Russian invasion of Ukraine, Igor Kazhdan was arrested on charges of smuggling military and dual-use products to Russia. In total, the charge contains 13 counts. He pleaded guilty to two counts. He admitted that he began doing business with Russian firms in 2016 “bypassing export restrictions.”

In November 2022, the Federal Court sentenced him to three years of probation and awarded a fine of $200, and he was also confiscated $7,000.

If convicted of all charges, he faces 40 years in prison.

In particular, the case file refers to the sale of amplifiers to the American Qorvo company.

According to Ukrainian officials, Qorvo amplifiers used in radar, communications and radio equipment were found in Orlan drone radio communication schemes.

In its statement for Reuters, the Qorvo representatives said the “stated destination” of the parts mentioned in the case is a distributor in Florida. They added that they never did business with IK Tech or Igor Kazhdan, and the company’s products were exported and used without their knowledge.

Import of technological goods in the Russian Federation doesn’t stop

The day before the investigation was published, Pavlo Kashchuk, a Ukrainian volunteer, published a photo of the navigation modules of the U-box company, which were found in the system for protecting against obstacles to the Comet-M navigation channels. These were components of the Orlan-10 UAV. Kaschuk noted that they didn’t try to hide the origin of the modules, they simply removed stickers.

“Unfortunately, the import of such small things into Russia is unlikely to be stopped, but the U-blox company times ago should have removed GLONASS support in its products,” Pavlo Kashchuk added in his post.

Previously, five citizens of the Russian Federation and two U.S. citizens were accused of exporting prohibited technological goods to the Russian Federation in the United States.

Journalists also discovered schemes for the supply of U.S. electronic components through Turkish and Hong Kong companies.