June 16, 2024

Mikayla Macfarlane

Serving technology better

Russian microchip smuggling ring exposed after decades

2 min read
Russian microchip smuggling ring exposed after decades

A sophisticated Russian smuggling ring that acquired microchips and other sensitive technology from the West for Moscow’s defense industry has been exposed after operating for decades.

According to a recent Financial Times report, the smuggling network was centered around Maxim Ermakov, a Russian businessman sanctioned by the U.S. and U.K. recently. Despite having no public ties to Russian defense companies, leaked records show Ermakov claimed to work for Istok, a state-owned manufacturer of electronic warfare systems for the Russian military.

Financial Times reported that Ermakov used many countries’ systems to gain access to restricted microchips

Ermakov used a complex web of front companies in countries like Ireland, France, and the UAE to acquire restricted microchips from companies like Ommic, a struggling French manufacturer. The microchips, which have both civilian and military uses, were smuggled to Russia through elaborate routes designed to disguise the end-user and bypass export controls.

Former Ommic director Marc Rocchi relied heavily on Ermakov’s business to keep the company afloat despite knowing the microchips were bound for Russia’s defense industry. Rocchi is now awaiting trial in France on charges related to the smuggling scheme. Ommic has since shut down after French authorities seized the company’s shares.

The smuggling ring has used a deep network to circumvent restrictions

According to export control experts, Russian intelligence agencies have long used networks like Ermakov’s to circumvent restrictions on acquiring Western technology. While parts of his network have been sanctioned, Ermakov continues to operate and recently imported materials useful for manufacturing microchips into Russia through new front companies.

The investigation highlights the ongoing challenge of preventing Russia from acquiring sensitive Western technology, even as export controls tighten. Analysts say new fronts quickly emerge when existing networks are disrupted. With microchips critical for Russian electronic warfare, smuggling will likely persist regardless of sanctions.

Featured Image Credit: Photo by Ferid Faiqoglu; Pexels; Thank you!

Radek Zielinski

Radek Zielinski is an experienced technology and financial journalist with a passion for cybersecurity and futurology.

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