New Indictment Details Russian Efforts to Buy US Microelectronics for Military
A DOJ indictment unsealed this week charges three Russians with export control violations after the agency said they illegally bought more than $225,000 worth of U.S. microelectronics, hiding from American exporters that the items were destined for the Russian military.
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The 27-page indictment builds on a temporary denial order issued against the Russians by the Bureau of Industry and Security last year, which placed export restrictions on Russian-German national Arthur Petrov along with Russian nationals Zhanna Soldatenkova and Ruslan Almetov for their involvement in the export transshipment scheme (see 2309010020). DOJ extradited Petrov to the U.S. from Cyprus in August (see 2408120005) and charged all three on Oct. 9 with various export violations, including violating the Export Control Reform Act.
Petrov, Soldatenkova and Almetov used several third-country companies, including Cyprus-based Astrafteros Technokosmos, to “deliberately” conceal from U.S. exporters that their controlled electronics would actually be sent to St. Petersburg-based Electrocom VPK, said James Dennehy, assistant director in charge of the FBI’s New York field office. Electrocom then sold the electronics to Russian military suppliers and other U.S.-sanctioned companies.
Jonathan Carson, special agent in charge of the BIS New York office, said the case highlights the cooperation between DOJ, the FBI and the Commerce Department to “charge alleged violators wherever they may be worldwide.” Soldatenkova and Almetov remain at large.
“Illegal global procurement networks that prop up the Russian war machine will not be tolerated,” Carson said.
BIS outlined many of the scheme’s details in its September 2023 denial order, though the DOJ indictment sheds more light on how Petrov hid from U.S. exporters that the shipments would violate export controls and how he, Soldatenkova and Almetov knew their actions would violate U.S. trade regulations.
DOJ said Petrov told American firms that he was "Head of Purchasings" for Cyprus-based Astrafteros, but his “public online profile” showed he worked for Russia-based Electrocom as recently as February 2022. DOJ also said his “email signature blocks” and the “content of his email correspondence made clear that he was still working for Electrocom but doing so under the Astrafteros name.”
The three Russians told U.S. companies their goods would be shipped to Cyprus, Latvia or Tajikistan, DOJ said, even though they used “pass-through shipping companies” in each of those countries to receive the items and transship them to Electrocom in Russia. Those items included export-controlled 16-bit flash microcontrollers, digital signal processors and integrated circuits.
In one instance in January 2023, Petrov bought 90 controlled microcontrollers from an unnamed U.S. distributor, telling the company that Cyprus was the “final destination.” The distributor included language in the sale’s invoice to note that the items were controlled under Export Control Classification Number 3A991.a.2 and were authorized "only to the country of ultimate destination for use by the ultimate consignee or end-user(s) herein identified.” The distributor also wrote that the items couldn’t be "resold, transferred, or otherwise disposed of, to any other country or to any person other than the authorized ultimate consignee or end-user(s)."
Despite that language, Petrov shipped the microcontrollers to Juzhoi Electroni, a shipping company in Tajikistan run by Almetov, who is also the co-founder and general director of Russia-based Electrocom. DOJ said Soldatenkova then “participated in ensuring that the shipment reached Russia,” including by emailing a contract to Almetov detailing the sale from Juzhoi to Electrocom.
“The consignee on the contract, which was not provided to” the U.S. distributor, “was listed as Electrocom alongside its address in Saint Petersburg, Russia,” DOJ said.
Soon after, Soldatenkova emailed an employee with Aviasystems, a Russian aerospace company and military supplier, to let them know that a shipment had arrived at Russian customs. She wrote: “Due to the fact that they are dual-use, we try to make certificates for them," according to DOJ. This was “an apparent reference to the military applications for the goods and Soldatenkova efforts around this time to facilitate shipment of such goods to Electrocom in Russia,” the agency said.
Petrov, Soldatenkova and Almetov each face maximum 20-year prison sentences if convicted of various counts related to conspiracy to violate ECRA and violations of ECRA. They also face smuggling, money laundering and wire fraud charges.