Chinese Intermediary Aids Russia’s Siemens Equipment Purchase

While ramping up military production for the war in Ukraine, Russia circumvented Western sanctions by purchasing equipment from Germany's Siemens through an intermediary that imports technology from China, The Gaze reports, citing Reuters.

Siemens equipment for automating machinery at Biysk Oleum Factory (BOZ) in southern Siberia was acquired through a Russian intermediary sourcing technology from Chinese wholesalers.

BOZ manufactures TNT and octogen, both of which have civilian applications, but as a subsidiary of a Russian state-owned company, it fulfills defense orders for the Ministry of Defense.

BOZ's parent company, the federal state-owned enterprise Y. M. Sverdlov Plant, is already subject to US and EU sanctions. In October 2022, BOZ signed an agreement with Russian intermediary Techpribor to purchase Siemens equipment, and before the delivery deadline, Techpribor received a batch of equipment from Chinese supplier Huizhou Funn Tek. 

Nevertheless, according to Reuters, Siemens had no knowledge of the supply of its equipment to the Russian explosives manufacturer.

The supply of Siemens equipment from China to Russia exposes a significant loophole in sanctions legislation, allowing Moscow to continue its war in Ukraine. 

Although the EU and the US strictly prohibit companies under their jurisdiction from supplying goods for Russian military needs, Russian manufacturers have found ways to bypass these restrictions by using Chinese wholesalers and resellers as intermediaries. 

In response to this circumvention, the European Union imposed full sanctions for the first time in December 2024 against Chinese companies supplying components to the Russian defense sector. Furthermore, on July 18, 2025, the sanctions list was expanded to include seven additional companies from China and Hong Kong.

Read more in The Gaze: New Sanctions against Russia – How they Reduce its Ability to Wage War