The ongoing conflict in Ukraine has impacted the Russian military’s vehicle inventory, leading them to increasingly depend on civilian trucks for transportation of equipment and personnel. The full-scale invasion, which commenced three years ago, has been met with strong opposition from the West, including sanctions from the U.S. and EU.
These sanctions, which were enforced shortly after the invasion began in February 2022, aimed to cut off the flow of Western automobile components that could potentially assist the Russian military. However, a recent investigation by Schemes, RFE/RL’s Ukrainian Service’s investigative unit, and Norwegian public broadcaster NRK, revealed that a leading Norwegian automotive supplier has been indirectly supplying truck parts to Russia, thereby bolstering its war machinery.
Kongsberg Automotive, a Norway-based firm and a significant supplier for leading automobile brands like Volvo, Ford, Scania, and Jaguar Land Rover, claims to have voluntarily stopped all direct exports to Russia in 2022, citing it as an immoral act to sell to an “aggressor” state.
However, confidential Russian customs records obtained by Schemes revealed that Hidirusta Otomotiv, a Turkish intermediary and a customer of Kongsberg Automotive, made at least 126 shipments of auto parts to Russia between July 2022 and April 2024. These shipments, worth approximately $2.8 million, were made possible as Turkey is not part of the Western sanctions coalition against Moscow.
This indirect route of supplying vehicle parts to Russia highlights the challenges that Western governments face in curbing the supply of essential equipment to the Russian military. The case of Kongsberg Automotive is particularly significant as it raises questions about the effectiveness of sanctions and the responsibility of companies to ensure their products do not end up supporting war efforts.
Kongsberg Automotive has expressed disapproval of the resale of its parts in Russia, calling it “unacceptable and contrary to our values.” The company has terminated its relationship with Hidirusta Otomotiv and has now mandated its customers to uphold sanctions.
The case serves as a reminder for investors about the importance of conducting thorough due diligence, especially in politically sensitive times. It underscores the role of global businesses in upholding ethical practices and the need for greater scrutiny in international trade to ensure compliance with sanctions. The incident also casts a shadow over the effectiveness of EU’s sanctions policy, calling for a more robust system to monitor and enforce these restrictions.
