Austria Cracks Down on Sanctions-Evasion Network Supplying Russian Arms Industry
Austrian authorities have dismantled a complex scheme aimed at evading EU sanctions imposed on Russia's military industry in 2022. The operation targeted networks that exploited intermediary companies in countries like Spain and Hong Kong to supply critical machinery to Russian manufacturers.
At the center of the evasion network is radial forging technology, which is used to produce metal components for artillery barrels and other weapons. Austrian manufacturer GFM is one of the world's leading producers of these machines, with some still actively in use at Russian facilities.
A documented transaction revealed that a used 1983 CNC forging machine was sold for $1.3 million and shipped from Spain to AZK Group LLC, a Russian firm. Between 2022 and 2024, Hennlich's Russian subsidiary completed 583 shipments valued at $2.9 million.
Austria has faced criticism for its slow enforcement of sanctions, with the EU imposing restrictions on dual-use goods in 2022 following Russia's invasion of Ukraine. The country's handling of this situation highlights a vulnerability in the sanctions regime: companies with pre-existing Russian subsidiaries or joint ventures that continued operating after sanctions took effect.