Investigations
For Japan’s Tsugami, Russia’s invasion of Ukraine has brought a surge in profits. By 2024, the company’s shipments to Russia – including high-precision machine tools – had soared to more than twenty times what they were at the start of the war. These machines are critical to keeping Russia’s military production running.
According to State Customs Committee records reviewed by The Insider, Tsugami’s exports of metalworking machines and parts to Russia jumped from $2.5 million in 2021 to $62 million in 2024. Almost all of the equipment was brand new: just 4 of the 206 shipments in 2024 were marked as used. The paperwork shows the goods were mainly routed through China.
Tsugami specializes in modern, high-precision CNC machines that outperform most of their Chinese rivals. In Russia, they’re used across industries, including by Radiopribor, an open joint stock company which makes onboard navigation systems. Reports of Tsugami’s shipments to Russia first surfaced in 2023, when Oleksandr Lemenov, then an adviser to Ukraine’s prosecutor general, raised the alarm. Since then, the flow of equipment has only grown.
Imports of Tsugami machines to Russia
In 2024, most shipments from China were handled by a company called Ele Technology. The deliveries continued at least until October, when the firm was placed under U.S. sanctions. A distant second was Shenzhen Yile Equipment – which does not even have its own website – followed by Lewin Limited of Hangzhou and Hong Kong-based Grun Grup Limited. All other intermediaries held only a negligible share of the market.
Major exporters of Tsugami machines to Russia in 2024
In Russia, the main buyer of Japanese machines in 2024 was AMG LLC, a large company long under sanctions, which accounted for 87% of the market. AMG had already been named in a previous The Insider investigation as one of the leading suppliers of Taiwanese machine tools to Russia’s military-industrial complex. It was sanctioned for “supplying equipment and metalworking machines to Russian manufacturers.”
On rare occasions, end users purchased the machines directly. Among them were Aerospace Systems Design Bureau JSC – which develops onboard systems, including for the Ka-226 helicopter – and Dubna Cable Plant JSC. But such direct deals were the exception in 2024: in most cases, manufacturing companies found it easier to outsource foreign trade operations to intermediaries.
Importers of Tsugami machines in Russia
In response to The Insider’s inquiry, Japan’s Ministry of Economy, Trade and Industry said Japanese equipment is not exported directly to Russia. The ministry acknowledged the problem of sanctions evasion involving Japanese goods, including metalworking machines, and said it was “focused on identifying third-country organizations involved in circumventing sanctions” and “sharing information with allied nations.”
“The ministry provides information and guidance to strengthen compliance mechanisms at Japanese companies. We are aware that Tsugami manufactures machines in China, and, as with other Japanese firms, the ministry supplies them with information to ensure strict export controls,” the response also said.
Tsugami did not respond to The Insider’s written or phone inquiries.
The Insider has previously reported on how the market for supplying Russia with metalworking equipment from democratic countries – including Taiwan, South Korea, Germany, Italy, and the Czech Republic – is structured.