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Justice served? Swiss Attorney General's Office turns blind eye to machinery supplies for Russian military plant

Following the annexation of Crimea and the beginning of hostilities in the Donbas, the European Union banned the export of dual-use products and military technology to Russia. However, this did not stop some European entrepreneurs from maintaining their Russian partnerships. As The Insider found out, European equipment continued to flow to a Russian rifle plant, among other recipients, and when the Swiss Attorney General's Office was alerted to this fact, it did not detect anything suspicious.

Content
  • The Swiss armorer

  • Ulli Sigloch's Russian contracts

  • The world's best rifle

  • Gullible Swiss prosecutors

RU

The Swiss armorer

On August 24, Der Spiegel reported the arrest of an Ulli S., the CEO of a Baden-Württemberg company (the German press is prohibited from disclosing the full names of suspects and defendants). According to the journalists, the arrest had been sanctioned by Germany's Public Prosecutor General on the charges of foreign trade law violations. As Der Spiegel specified, the violations in question consisted of shipping 2 million euros worth of high-precision machinery to Russian weapons manufacturers in 2015. Even then such shipments were subject to German sanctions imposed after the annexation of Crimea.

The Insider deduced that only one German CEO met Der Spiegel's description: Ulli (Ulrich) Sigloch, the head of SiTec Präzisionstechnik Handels- und Produktionsgesellschaft mbH, a German company manufacturing and distributing high-precision metalworking machinery. Previously, he also owned Waffenfabrik Neuhausen AG, a Swiss weapons manufacturer.

Having examined Russian court orders, we learned that Biostrom International AG, a partner of Sigloch's Swiss enterprise, Ulli Sigloch Holding AG, undertook to supply engineering equipment from its Swiss warehouse to Russia for a total of 2,074,324.41 euros. This evidence is corroborated by the Import Genius customs database. On December 10, 2015, Biostrom declared four articles for export to Russia: three DMG Deckel Maho and DMG Gildemeister high-precision metalworking machines and a DMG Mori optical measurement device.

The machinery was purchased by OOO GK Promtekh (known as OOO UK Proizvodstvennye Aktivy when the deal was signed). Under another contract with OOO Promtekhnologiya cited by Russian courts, Ulli Sigloch committed to developing “the technological process and relevant documentation and performing the installation and commissioning of the machinery”. Court papers also suggest the existence of a contract between Biostrom International AG and Ulli Sigloch Holding AG.

Ulli Sigloch's Russian contracts

Russian limited liability company OOO Promtekhnologiya is under numerous international sanctions. It is best known as the manufacturer of Russian Orsis rifles and a long-standing supplier of sniper rifles to Russia's Ministry of Internal Affairs, the National Guard, and the Federal Penitentiary Service. According to Proekt, Orsis T-5000 rifles were also issued to Wagner fighters. Although Promtekhnologiya denies the connection, there is video evidence of Prigozhin's PMC indeed using the Orsis T-5000.

The Orsis T-5000 rifle
The Orsis T-5000 rifle

The GK Promtekh group of companies and OOO Promtekhnologiya share the same founder and sole shareholder: joint-stock company AO Promyshlennye Tekhnologii.

Its owners are not disclosed in Russia’s Unified State Register of Legal Entities. According to The Bell, in 2010, Promtekhnologiya received investment from Konstantin Nikolaev, a Ukrainian-born Maltese entrepreneur residing in Switzerland. He is also known for sponsoring the hapless Russian spy Maria Butina, the founder of the Russian “Right to Bear Arms” movement. His Promtekhnologiya co-investor was Mikhail Abyzov.

Konstantin Nikolaev
Konstantin Nikolaev
Photo by Proekt

Having studied the latest publicly known composition of the Tula Cartridge Plant (TulAmmo) board of directors within the same group of companies, Proekt also spotted the associates of the Rotenbergs, a family notoriously close to Putin.

The world's best rifle

From 2011 to 2014, AO Promyshlennye Tekhnologii was headed by Alexei Sorokin, a renowned Soviet shooter and the designer of the Orsis rifle.

Alexei Sorokin
Alexei Sorokin
Photo by TechInsider

In a 2013 interview for the Echo of Moscow, Sorokin advertised the supplies of his rifles to Austria and Switzerland, emphasizing that “the Swiss were amazed by the quality”: “We employ a unique barrel technology that ensures the high precision of shooting.”

While Promtekhnologiya is a private company, Sorokin admits: “We’re getting favorable treatment from the Military Industrial Commission... Founding the company, we had the interests of the state in mind, focusing on import substitution in a segment that I find strategically important.”

The interviewer remarks: “But you still have to use foreign machinery, unfortunately.” Sorokin regrets it too – although Russia is yet to occupy Crimea at that point:

“All of our machines are state-of-the-art, with extensive capabilities and high precision. No developed country or exporting agency will permit bringing these machines to Russia.”

And yet Switzerland did.

Gullible Swiss prosecutors

The Swiss commercial register indicates that Biostrom International AG (currently pending liquidation) is headed by two executives with Russian names: Alexei Babkin and Spartak Sotnikov. Moreover, the court orders also suggest that high-precision metalworking equipment was being supplied to Promtekhnologiya for the batch production of .223 and .308 B&T APC self-loading carbines, with the knowledge of the Swiss exporter. (During installation, it turned out that the Russian party lacked the rights to develop a batch production process for said carbines.) The .223 is a NATO army caliber. The .308 is used both in the military and in hunting weapons.

Biostrom International AG was headed by executives with Russian names
A B&T APC carbine
A B&T APC carbine

In its investigation, Radio SRF revealed that Biostrom International AG had requested a permit from Switzerland for the export of high-precision machinery to a steelworks in the Urals. Switzerland’s SECO, the State Secretariat for Economic Affairs, contacted the EDA Department of Foreign Affairs and the Federal Intelligence Service and issued said permit. However, in 2018, SECO learned that at least two out of five machines were being operated by AO Prommekhanika, an entity within the same group of companies as Promtekhnologiya. As Prommekhanika also focuses on manufacturing weapons, SECO filed a suit with the Swiss Attorney General's Office in the summer of 2018.

The Insider submitted an inquiry to the Attorney General's Office. According to the official reply, criminal proceedings were initiated against two individuals. One of the cases dealt with the violation of Kriegsmaterialgesetz (the Law on War Material) and was soon closed. According to the criminal complaint dismissal order made available to The Insider, a Biostrom International AG spokesperson explained that they had fully trusted their Russian client, GK Promtekh, which had insisted that the machines had been intended for a different, non-military enterprise. The spokesperson insisted that Biostrom International AG had not been informed about the transfer of machinery to Prommekhanika. The prosecutors took his explanations at face value.

The proceedings of the other case resulted in a 1,800 CHF fine for Biostrom International AG’s CTO, who had failed to timely report to SECO on the end-user of the exported equipment. When he finally did, he offered false information, but the Attorney General's Office chose to believe in the CTO's ignorance and did not prosecute him further.

According to the dismissal order of the criminal complaints against Ulli Sigloch, he was suspected of violating the Law on War Material by signing an export deal on technical data for the manufacturing of firearms without SECO’s permission. Under the contract, he was to develop the technological process and relevant documentation and arrange the installation and commissioning of the machines.

Ulli Sigloch was suspected of signing an export deal on technical know-how for the manufacturing of firearms without SECO’s permission

Ulli testified that he had not intended to replicate a specific type of firearm in Russia and had not been aware of the buyer's plans for the machinery at the time of signing. Therefore, he could not have requested a know-how export permit from the relevant Swiss authority when he was finalizing the deal with the Russian armorers. Consequently, all Ulli ever wanted to do was to teach the Russian sniper rifle manufacturer how to use metalworking equipment. The prosecutors bought into his story. They did not interpret his actions as an attempt to export military technology, so they saw no need to submit the contract to the scrutiny of the supervising authorities.

The aforementioned orders of the Swiss Attorney General's Office go back to January 2019. Michael Lauber, the Attorney General at the time, often overlooked Russia-related instances of corruption within his team. The orders on Biostrom International AG and Ulli Sigloch were signed by the Federal Attorney Kathrin Streichenberg and endorsed by the Lead Federal Attorney Carlo Bulletti.

In response to The Insider's inquiry, the Swiss Attorney General's Office asked to consider the timeline of its decisions. “With regard to your mentioning of the international sanctions against Russia, this should be assessed and considered accordingly...”

The Insider has submitted inquiries to the German Public Prosecutor General's Office and SiTec Präzisionstechnik Handels- und Produktionsgesellschaft mbH. There has been no response.

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