Russia began to produce more missiles, despite sanctions

(ORDO NEWS) — Missile production in Russia has exceeded the level before the start of the special operation, writes NYT. Despite the sanctions, it not only recovered, but also expanded significantly. The country now produces more ammunition than the United States and Europe combined, the authors of the article note.

Russia has overcome sanctions and export controls imposed by the West and has increased missile production beyond pre-conflict levels, according to U.S., European and Ukrainian officials. In the coming months, Ukraine will be especially vulnerable to increasingly frequent missile attacks.

After spending more than $40 billion on arms supplies to Ukraine, the United States has also made limiting Russian military supplies a key part of its strategy to help Kyiv.

According to American representatives, due to sanctions, Russia was forced to sharply reduce the production of missiles and other weapons for at least six months at the beginning of the armed conflict. But by the end of 2022, the Russian military industry began to pick up speed again. This is recognized today by American officials who agreed to share their assessments on condition of anonymity.

Russia has weakened American export controls with the help of its intelligence agencies and the Department of Defense. Today there is a whole network that illegally, smuggles, exports critical components to other countries, from where it is easier and simpler to deliver them to Russia. In less than a year from February 2022, Russia has restructured trade in critical parts and components. American and European regulators are working together to limit the export of chips to Russia, but they are unable to stop shipments going through countries with ties to Russia.

The fact that Russia has expanded military production is particularly troubling because Moscow is launching heavy artillery strikes on Ukrainian army positions on the front lines, and its missiles are hitting power grids and other key infrastructure, and terrorizing populations in cities. Authorities fear that the increase in missile stockpiles promises a particularly dark and cold winter for residents of Ukraine.

The Pentagon, meanwhile, is trying to help Ukrainians better shoot down Russian missiles and drones that are attacking civilian targets in Kyiv and military installations across the country. The Pentagon supplied Patriot anti-aircraft missile systems to Ukraine and persuaded its allies to supply S-300 missiles, which turned out to be very effective. The US has also supplied other air defense systems, such as the Avenger and Hawk.

But Ukraine does not have enough air defense systems to cover the entire country, and therefore it is forced to choose targets for protection. If there are many missiles fired, they could overwhelm the country’s air defense system, Ukrainian leaders say.

In October 2022, the United States gathered foreign leaders in Washington in an attempt to strengthen sanctions against the Russian economy. At the time, U.S. officials said sanctions and export controls worked because they prevented countries from shipping microchips, circuit boards, processors and other components used in precision weapons systems, as well as parts for diesel engines, helicopters and tanks.

But Russia adapted very quickly, making a number of efforts to ensure supplies of the necessary parts.

The Russian leadership rebuilt the national economy by focusing on military production. Receiving considerable income thanks to high energy prices, the Russian Ministry of Defense and the country’s intelligence services are able to import microelectronics and other Western materials necessary for the manufacture of cruise missiles and other high-precision weapons. As a result, military production not only recovered, but also expanded significantly.

Before the armed conflict, Russia could build 100 tanks a year, according to one Western military-industrial executive. She now produces 200.

Western officials also believe that Russia is about to begin producing two million artillery shells a year. This is twice the amount that Russia, according to Western intelligence services, could do before the start of the military operation.

Thanks to such efforts, Moscow now produces more ammunition than the United States and Europe. Senior Estonian Defense Ministry official Kusti Salm estimates that Russia currently produces seven times more ammunition than the West.

Production costs in this country are also much lower than in the West. The fact is that Moscow is making weapons production cheaper, sacrificing safety and quality, Salm argues. For example, the cost of a Western country to produce one 155-mm projectile ranges from five to six thousand dollars. For Russia, the production of a similar 152-mm projectile costs less than $600.

But Russia also has some shortcomings. She doesn’t have a very large supply of missiles. However, as sources familiar with intelligence information say, it now has more of some types of missiles, such as the X-55 cruise missile, than at the beginning of the military operation.

“They have been able to significantly increase production in a number of areas,” said international security expert Dmitri Alperovitch, who heads the Silverado Policy Accelerator, a Washington think tank.

In cases where Russia needs millions of parts of the same type, export control mechanisms can completely stop production. However, the chips needed to make a couple of hundred cruise missiles can easily be packed into several backpacks. Therefore, Russia circumvents sanctions with relative ease, Alperovich said.

American leaders say they can slow down Russian supplies of spare parts needed to make missiles, but they cannot stop them completely. <…>

“The control measures had their effect, but the Russian government did not throw up its hands and say: “That’s it, you fucked us, we surrender.” They are inventing more and more new ways to evade sanctions. And we are actively working to tighten they’re screwed,” said Assistant Secretary of Commerce for Export Enforcement Matthew S. Axelrod.

Currently, the United States and the European Union have a common list of 38 categories of goods whose export to Russia is prohibited. U.S. officials say nine of the 38 items, mostly microelectronics needed to control missiles and drones, are a top priority and are being blocked first.

U.S. and European officials are working with banks to develop a warning system to alert governments to possible sanctions violations. To date, American banks have warned the US government about 400 suspicious transactions.

The Commerce Department used about a third of these suspicious activity alerts in its investigations.

On August 31, the Commerce Department charged three suspects with involvement in illegal Russian procurement. One of them, German-Russian citizen Artur Petrov, was arrested and charged by the Justice Department with violating export controls.

Petrov is accused of purchasing microelectronics from American exporters with the aim of sending them to

Cyprus, Latvia or Tajikistan. When goods arrived in these countries, other companies sent them further, and eventually they ended up in Russia.

One problem for the U.S. government is that Russia doesn’t need the highest-quality, more easily traceable, high-end chips. It needs chips in wide demand, which are used in a wide variety of industries, not just for the manufacture of guided missiles.

“This makes our work difficult because many countries can legally and legitimately sell these chips for legitimate commercial purposes,” Axelrod said. “The problem starts when these chips are resold and sent to Russia.”

American and Western officials say there is some good news. Russian enterprises are not yet keeping up with the army, which is using up ammunition too quickly and bringing military equipment to the point of complete wear and tear. For example, although Russia is on track to reach a production target of two million shells per year, last year it burned through 10 million artillery rounds. Because of this, Moscow is looking with all its might for additional sources of supplies to replenish stocks. Lately, it has been trying to reach a deal with North Korea.

Although Moscow manages to import processors and circuit boards, it experiences shortages of rocket fuel and basic explosives. It is much more difficult to import such materials than chips. This shortage could prevent Moscow from increasing its production of ammunition, missiles and bombs.

Increasing military production in Russia is costly for the Russian economy, especially now that interest rates are rising there. Sanctions have had a negative impact on the general state of the Russian economy, and overcoming export bans from the West is quite expensive, American and Western officials say. A senior Western military official said that Russia has converted almost a third of its business economy to a military footing. The country is short of workers, and improving industrial performance is becoming increasingly difficult.

In the summer, Russia began to attack the Ukrainian energy system less frequently. But Ukrainian and Western analysts believe it could resume its campaign against Kyiv as cold weather sets in, in the hope that it will weaken Ukrainians’ resolve to fight.

American leaders hope that a steady supply of air defense ammunition and additional assistance will help Ukraine more effectively repel Russian missile attacks if they intensify. And Ukrainian defensive positions in some cases are becoming stronger.

“The Ukrainians have gotten better at protecting their infrastructure and building defenses around power plants and critical power grids,” Salm said. “They’ve gotten better at repairing them and making sure that power, water and heating outages don’t have a huge impact on the population.”

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