The U.S. Department of the Treasury has imposed sanctions on three companies and one individual for their involvement in the production of Russia’s Garpiya series of long-range attack drones. These unmanned aerial vehicles (UAVs) have been deployed in Russia’s ongoing war against Ukraine, targeting critical infrastructure and causing significant casualties.
The latest measures, announced by the Treasury’s Office of Foreign Assets Control (OFAC), demonstrates the growing international collaboration between Russia and the People’s Republic of China (PRC) in the production of military hardware. The sanctions target Chinese entities directly involved in the development and manufacture of complete weapons systems, marking the first time the U.S. has sanctioned Chinese companies for such activities.
Russia’s Drone Program and Chinese Collaboration
According to OFAC, the Garpiya drones are produced in factories in China with the involvement of Russian defence firms. These drones are then transferred to Russia for use in the ongoing conflict with Ukraine. The PRC-based companies involved include Xiamen Limbach Aircraft Engine Co., Ltd. (Limbach), which produces the L550E engines for the Garpiya UAVs, and Redlepus Vector Industry Shenzhen Co Ltd (Redlepus), which has collaborated with the Russian defence firm TSK Vektor OOO (TSK Vektor). TSK Vektor has served as a middleman between Chinese suppliers and the Russian defence industry.
Russian defence firm Joint Stock Company Izhevsk Electromechanical Plant Kupol (AO IEMZ Kupol), a subsidiary of Russia’s state-owned weapons company JSC Aerospace Defense Concern Almaz-Antey (Almaz-Antey), oversees the production of the Garpiya series UAVs in China. AO IEMZ Kupol has been under U.S. sanctions since December 2023 for its role in the development of Russia’s air defence systems.
In addition to the Chinese companies, Russian national Artem Mikhailovich Yamshchikov has been sanctioned. Yamshchikov is the General Director of TSK Vektor and has played a key role in procuring sensitive components for Russia’s UAV programme. He is also the owner of Limited Liability Company Trading House Vector (TD Vector), another entity involved in Russia’s drone production.
Sanctions Under Executive Order 14024
The sanctions were imposed under Executive Order (E.O.) 14024, which targets individuals and entities involved in harmful foreign activities by the Russian Federation. This includes actions related to Russia’s aggression in Ukraine, such as facilitating the development of military equipment used in the conflict.
Acting Under Secretary of the Treasury for Terrorism and Financial Intelligence, Bradley T. Smith, emphasised the significance of the sanctions, stating,
“Russia increasingly relies on the expertise of foreign professionals and the import of sophisticated technologies to sustain its weapons programme and advance its military campaign against Ukraine. We will continue to disrupt the networks that enable Russia’s acquisition and use of these advanced weapons.”
The targeted sanctions aim to cut off these entities from the U.S. financial system and restrict their ability to engage in international trade. All property and interests in property belonging to the designated individuals and companies that are under U.S. jurisdiction will be blocked. Additionally, any transactions involving U.S. persons or entities connected to the sanctioned individuals or companies are prohibited.
Impact on Foreign Financial Institutions
The Treasury Department has also warned that foreign financial institutions that facilitate significant transactions with the sanctioned entities may themselves face U.S. sanctions. This measure is intended to prevent foreign actors from circumventing the restrictions by using non-U.S. financial networks.
In its updated guidance, OFAC stressed that foreign entities involved in Russia’s military-industrial base risk facing similar sanctions. OFAC’s Economic Sanctions Enforcement Guidelines provide a framework for how violations of these sanctions will be addressed.
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