
Recently, the United States imposed sanctions on individuals, companies, and institutions supporting Russia’s military machine in its war against Ukraine.
The U.S. took a significant step by putting Alexey Likhachev, the CEO of the Russian state-owned energy company Rosatom, and 13 members of the company’s board of directors on the sanctions list. Most notably, the U.S. government banned the import of Russian uranium. Until now, Rosatom has managed to avoid substantial international sanctions, but the current U.S. sanctions package sets a precedent for increasing pressure on the Russian energy company.
The CEO of Rosatom, Alexey Likhachev
So far, the subsidiaries of Rosatom have been put under Western sanctions. These were mostly entities engaged in non-core activities of the corporation, while key divisions remained largely untouched.
However, the U.S. decision to ban Russian uranium imports until 2040 is a compromise, as the Department of Energy retains the authority to grant exceptions to companies if they can prove that there are no alternatives.
Why implementing effective sanctions against Rosatom is a challenging task?
The likely reason lies in the production and technological dominance of the Russian company in the nuclear industry. Rosatom is one of the world’s largest designers of nuclear reactors, controlling 40% of global conversion capacity (utilizing 40% of the world’s capacity for processing or converting materials into forms suitable for further use) and 46% of enrichment capacity. It is also the sole producer of a new type of fuel for fourth-generation (Gen IV) nuclear reactors.
For example, in 2021, Russian uranium accounted for 14% of the U.S. imports, and the Rosatom provided 28% of uranium enrichment services. In the EU, Russian uranium accounted for 17% of supplies, with 22% in conversion and 30% in uranium enrichment services.
Clearly, eliminating this dependency is a lengthy process but not an impossible one. It largely depends on the political will of nations, and the U.S. has already taken the first step toward reducing its reliance on the Russian monopoly in the nuclear sector.
However, it is essential for all Western countries to impose and intensify sanctions against Rosatom. Let us look into the reasons why.
Putin’s Nuclear Power Plants
As noted in the previous article, Does Putin dream of nuclear power plants?, Rosatom encompasses 360 enterprises within the nuclear sector. This includes all civilian nuclear power plants in Russia, nuclear weapons complex, research organizations, and one of its key assets—the nuclear icebreaker fleet.
The company reported a total revenue of $11 billion in 2022, while the total value of Rosatom’s international projects exceeds $200 billion. Due to the lack of significant sanctions pressure, the company has significantly expanded its global presence.
A key focus is on nuclear reactor construction projects. Currently, Rosatom is building 34 nuclear power plant units in 11 countries, including Turkey, Egypt, China, Hungary, Bangladesh, India, Belarus, Uzbekistan, Armenia, Kyrgyzstan, and Myanmar. Notably, two countries on this list—Turkey and Hungary—are NATO members.
The Paks-2 Nuclear Power Plant project, which Rosatom plans to construct in Hungary
Additionally, the company is a global leader in uranium mining and enrichment. Despite a partial withdrawal from the EU and U.S. markets, it continues to expand its production capacity.
Another type of facility offered by the company is nuclear science and technology centers. These are currently under construction in Serbia and Bolivia, with negotiations underway for similar projects in Vietnam and Rwanda.
The Nuclear Science and Technology Center project in Bolivia.
Moreover, many countries, including EU member states, continue to purchase nuclear fuel from Russia. More than 10 nuclear reactors in the EU still rely on this fuel. Moving away from Russian fuel is challenging, as many reactors were designed and built during the Soviet era. However, we will delve deeper into this issue later.
Rosatom is a powerful geopolitical tool in the hands of the Russian government and its leader Vladimir Putin, on a par with Gazprom, which has been effectively used as to influence European countries. However, while efforts to counter Gazprom have begun, sanctions against Rosatom are still in their infancy, with the U.S. recently imposing measures against its leadership. Yet, this is far from sufficient.
For Rosatom, the loss of European and American markets is not critical. The company earns approximately €720 million annually from European markets and $1 billion from the U.S., but the total value of its international contracts amounts to $130 billion over the next decade. Additionally, its annual revenue continues to grow, reaching $11.8 billion in 2022.
Thus, losing these markets will not significantly impact the company, as Rosatom actively promotes its projects and services in countries of the Global South.
However, imposing sanctions on Rosatom and eliminating Western dependence on Russia is a moral obligation for democratic nations striving to end Russia’s military aggression against Ukraine, fully sever their energy dependence on Russia, and develop their own robust nuclear industries.
Since Rosatom is not subject to comprehensive sanctions, the company has unrestricted capacity to supply Russian military factories with components and dual-use goods that are utilized in weapons production. These weapons are used to destroy peaceful Ukrainian cities and kill Ukrainian citizens.
Not a Peaceful Atom: How Rosatom Contributes to the Production of Cruise Missiles
In our investigations such as Not a Peaceful Atom: How Rosatom Helps Create Cruise Missiles“ and Raduga Design Bureau: How Russia Continues to Produce Missiles Despite Sanctions, detailed processes of sanctions circumvention through the company Rosatom are exposed.
In this article, we revisit these violations.
The Kh-101 cruise missiles, a significant part of Russia’s arsenal, are produced by the Raduga Design Bureau (MKB Raduga). In 2023, Raduga manufactured 420 missiles, increasing production to 575 units in 2024. Plans for 2025 include a 20% production increase, reaching 700 Kh-101 missiles.
The Kh-101 Cruise Missile
This type of missile is actively used by Russia to strike peaceful cities in Ukraine.
The Raduga Design Bureau is part of the Tactical Missiles Corporation and plays a key role in producing missiles such as the Kh-101, Kh-59, Kh-55, and Kh-22. Despite international sanctions, the production of cruise missiles continues to grow rapidly.
An investigation by Frontelligence Insight (FI) confirms that the Raduga Bureau is in the process of expanding its production facilities. Satellite images from 2023 reveal new construction projects, including production areas within buildings M10, M11A, and M11B.
The Expansion of the Raduga Design Bureau’s Production Facilities
Documents obtained by the Ukrainian hacktivist community Cyber Resistance reveal that the Raduga Design Bureau continues to expand and modernize its production capacities by purchasing necessary goods from European and Chinese suppliers.
The 2023 technical modernization and reconstruction plan outlines a specific budget and a list of required foreign equipment. Most of the funding was allocated to purchasing new equipment, constructing and upgrading buildings, developing vehicle fleets, enhancing laboratories, and creating new IT programs.
Key companies supplying the required foreign equipment to the Russian bureau include Farsoon (China), Hangcha (China), Hision (China), Fagima (Italy), Automator (Italy), and Hottinger GmbH (Germany).
A review of the mid-year work progress report shows significant headway in meeting these goals. Products from these suppliers reach Raduga seamlessly, and in some cases, with notable success. Despite international sanctions, Raduga has managed to expand and modernize its facilities while acquiring the necessary equipment from European and Chinese sources.
This raises the question: How does Raduga continue to develop despite sanctions, and what role does Rosatom play in this process?
One possible answer involves the Mars Design Bureau (FGUP MOKB Mars).
MOKB Mars is a Russian company specializing in developing onboard automatic control and navigation systems for aviation and spacecraft vehicles. It manufactures onboard control systems for spacecraft such as the Elektro-L, Arktika-M, and Spektr-UF series. Additionally, it modernizes and produces control systems for booster stages and onboard systems for cruise missiles manufactured by Raduga.
Interestingly, this company operates under the Russian state corporation Rosatom, which likely explains how the necessary equipment finds its way to the Raduga Design Bureau.
Details on MOKB Mars Activities
For the Raduga Design Bureau and the M.P. Fedorov Dubna Machine-Building Plant (DMZ), MOKB Mars modernizes and maintains systems such as K-051M, U501M, and navigation modules SN-99, which are used in the Kh-series cruise missiles (Kh-32, Kh-59, Kh-101).
This information is derived from research reports dated February 13, 2023, which confirm that MOKB Mars performed repairs on the K-051M and U501M systems for Raduga and DMZ.
Reports on the Examination of Cruise Missiles for Malfunctions in the K-051M and U501M Systems
Although the company obtains Western components, it cannot fully circumvent sanctions. This is evident in the frequent malfunctions of the K-051M and U501M systems, as well as other components of cruise missiles. As a result, regular failures occur in the Kh-series cruise missiles.
This is confirmed by an analysis of the failure and recovery table for Kh-32 cruise missiles as of September 19, 2022. The table indicates that over 50% of Kh-32 missiles experienced issues with the K-051M and U501M systems. While most of these problems were resolved, it required significant time and resource expenditures.
This table, along with all investigative materials on MOKB Mars, can be accessed in the publication.
Returning to Rosatom. As previously noted, Rosatom has largely escaped sanctions, with only a few of its subsidiaries affected.
It is highly likely that dual-use goods are being imported for the production of cruise missiles and other weaponry under the guise of procuring equipment for critical information infrastructure (CII) security projects. One example of CII security development is the establishment of data processing centers (DPCs) at nuclear power plants.
Equipment used in the data processing centers of Rosatom’s nuclear power plants
Another area actively developed by Rosatom is the production of powders for 3D printing from titanium alloys. This allows the Russian company to manufacture its own materials using 3D printing technology. It is evident that this technology is being advanced with the assistance of Western companies due to the lack of international sanctions.
The production of these powders is carried out by the Chepetsk Mechanical Plant (JSC ChMZ), part of Rosatom’s Fuel Division, located in Glazov, Udmurt Republic.
Technologies for 3D printing with titanium alloys are also actively used in the production of weapon components. For example, in cruise missiles developed by the Raduga company, which undoubtedly has access to this technology.
According to some documentary evidence, Raduga has procured 3D printers and machines used for manufacturing components. One of the likely suppliers of such equipment is the Chinese company Farsoon, specializing in the production of industrial 3D printers. As noted earlier, this company has actively supplied its equipment to Rosatom, which, in turn, could have transferred it to Raduga through MOKB Mars.
Another supplier is the company Hottinger Brüel & Kjær. There is documentary evidence that in 2022, MOKB Mars purchased their equipment and then transferred it to the Raduga Design Bureau. However, it is unclear how much equipment was transferred from Mars to Raduga.
Although nuclear power is Rosatom’s core business, it is also actively involved in the delivery and production of components for military weaponry used by the Russian army to destroy peaceful Ukrainian cities.
Thus, summarizing the above, the following conclusions can be drawn:
- The U.S. has taken a significant first step by imposing sanctions on Rosatom’s leadership and, earlier in May 2024, on the import of Russian uranium. This has created the first real precedent in the fight against Russia’s nuclear energy sector. Throughout the full-scale invasion of Ukraine, the U.S. and EU have not introduced substantial sanctions against the nuclear industry, particularly Rosatom.
- This step should encourage European countries to impose sanctions on Rosatom and eliminate their dependence on it. It is objectively clear that reorienting production chains takes time, which is a challenging task in a global market with limited supply. A medium-term strategy for eliminating dependence on Russia’s nuclear industry is necessary for European countries. This will enable the EU to systematically plan and gradually introduce sanctions against Rosatom.
- Rosatom is engaged not only in “peaceful” nuclear activities but also actively participates in the development of weaponry used by the Russian army to destroy peaceful Ukrainian cities. Due to the absence of international sanctions, Rosatom can freely import dual-use components for its nuclear projects and for manufacturing elements of the Kh-series cruise missiles. Additionally, the company imports Western technologies for creating equipment used in weapon production, as in the case of 3D printing.
- Rosatom is a geopolitical tool of Russia, akin to Gazprom, allowing Moscow to exert political pressure on the governments of European countries and those in the Global South.
By imposing sanctions by the EU and the U.S. against Rosatom would help eliminate dependency on Russia and limit its ability to acquire components ostensibly for nuclear infrastructure but, in reality, for weapon production. This would also fulfill the moral obligation of democratic countries to stop financing Russia’s armed aggression against Ukraine.
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