China's method of avoiding sanctions by supplying drones to Russia: schemes, legal entities and training centers

^19/09/2023

The Chinese company iFlight continues to supply drones to Russia, even though it loudly declared that it no longer sells UAVs to Ukraine and Russia. This controversial statement only applies to the Ukrainian imported drone market, as China continues to supply drones to Russia using various covert schemes. Moreover, it's not only traditional allies like Iran that assist the aggressor nation.

Read about the details of these secretive deliveries in the Molfar publication.

The drone wars — tracing the roots of Russian UAVs

Modern military strategies are being transformed using drones. As Kyrylo Budanov emphasized, drones have drastically reduced the relevance of armoured vehicles in frontline combat.

At the same time, the company DJI claims its neutrality, suggesting they don't supply drones to war-torn countries. The actual scenario appears to be slightly varied. Ukraine's difficulties in accessing advanced drones are only increasing, while Russia, despite official restrictions, receives these drones through alternative channels.

There is evidence proposing that Russia is purchasing Mavic drones. The terrorist state has established an extensive network of schools within its borders, training UAV pilots—a matter we'll delve into shortly. These institutions specifically teach flying DJI Mavic drones. Although this drone was initially designed for civilian use, it can easily be adapted for military purposes. With such technology, Russia poses a threat not only to Ukraine but to all neighbouring countries. The DJI Mavic and other modern drones offer numerous advantages, ranging from cost-effectiveness to tactical flexibility on the battlefield. They detect enemy positions from considerable distances, deliver precision strikes, and reduce the risk to soldiers' lives. These capabilities make contemporary UAVs indispensable for military forces. Volunteers frequently raise funds to procure new UAVs for the Ukrainian army. While Ukraine's drone supply remains an open and constantly discussed issue, where does Russia source its drones?

Where do Russian drone pilots get trained?

Molfar analysts have identified numerous educational institutions where drone pilots, technicians, and engineers are trained. In this publication, we will focus on the largest of them. 

LLC "NPO “Avanti Group” (in Russian: ООО “НПО “Группа Аванти”)

As mentioned, it sponsors robotics competitions and educates children using its Avanti Education program. In May 2023, a legal entity, "GK Avanti," was established for "scientific research and development in the fields of natural and technical sciences." This business activity code is often used for cooperation with Russian military organizations. Training sessions are held at the following addresses: Russia, Moscow, Krasnopresnenskaya embankment 12, office 924B (yandex map). Also in the city of Innopolis, Universitetskaya street 7, room 602 (yandex map)."

LLC "Nebesnaya Mekhanika" (in Russian: ООО “Небесная механика”)

According to their website, this company distributes DJI drones in Russia. Among their clients, they list Russian state structures, including the Ministry of Internal Affairs (MVD), the Federal Protective Service (FSO), and the Ministry of Emergency Situations (MES). They have an office in Uzbekistan and their own UAV pilot training center. Training is conducted using DJI drones.

The probable address of the centre: Moscow, Luzhnetskaya Embankment Street (yandex map).

LLC "Vozdukh" (in Russian: ООО “Воздух”)

They have a training centre named Aeromotus Education, where they train UAV operators, specifically operators of DJI drones (1, 2). The course is designed for 72 hours.

Among the additional business activity codes of the company are:

• professional training;
• supplementary education for children and adults;
• activities of schools for training aircraft and watercraft.

In May 2022, they received a licence for educational activities. Their website states that on May 6, 2022, they established a specialized training unit of the education centre. Address of the training centre: Russia, Moscow, Varshavskoe Highway 42, floor 6, room 27 (yandex map).

Training Center "Pustelga"

TG Channel: @aucpustelga

The listed contact is @djiborz and ID 1661522905 (interests, groups, including RusDrone DJI and "Cinema Workers Abroad"). The profile's name was initially Yevgen, then changed to Boris.

Their TG channel was created on April 26. The first post states that the centre's instructors have already launched 2 centres in the combat zone in Ukraine. On May 4, a post features a photo of 18 individuals with the caption that it is the first graduation in April (1, 2). In a subsequent post, it's mentioned that the training centre has been operating since March. And throughout March-April, they've already trained 30 pilots and instructors. The centre is responsible for teaching regular and mobilized military personnel of the Russian Armed Forces, Rosgvardia, and other Russian security forces specialists. In a post from May 5, they were seeking investors. In one of the videos from a publication, a man in a military uniform with an "army of Russia" chevron receives a diploma in the centre (1, 2, 3, 4).

According to mk.ru, Rosgvardia, with the "Pustelga" training centre, has launched courses for FPV drone pilots who will most likely be sent to the war in Ukraine afterward. According to the article, by June 2023, the first group of FPV drone pilots had already completed their training at one of the Rosgvardia military units in the Moscow region. In addition to operators, they are also training FPV system instructors for units fighting in Ukraine. The training duration is 4 weeks. Instructors undergo additional training for a month. The training program includes carrying out tasks in open terrain, forest, and confined spaces. Operators learn to target moving equipment.

In the TG channel, there's a post from May 25, 2023, with a photo of an iFlight-produced drone next to weaponry (1, 2, 3, 4) with the caption: "Our graduate will soon receive these drones on the Zaporizhia front and will effectively combine them with new standard ammunition. We educate and support our graduates in word, deed and provide equipment as much as possible."

A post from May 14 mentions that training is conducted on Mavic drones produced by a DJI subsidiary (1, 2). In a post from June 2, 2023, there are photos from the training center's practical session where operators learn to repair drones (1, 2).

A post also states that instructor-graduates from 'Pustelga' have already graduated from their groups of drone operators heading to war in Ukraine (1, 2). In the same post, the training center asks sponsors to inquire about the UAV specifications at the center before purchasing drones, indicating that the center uses specific drone brands.

Drone Pilots School "SHUBBA-Octagon" (In Russian: "ШУББА-Октагон")

This institution is likely associated with the PMC "Wagner." In April 2023, this drone pilot school appeared on the Russian website Avito. They offer drone pilot training services. Locations include Kursk, Voronezh, Belgorod, Rostov, Bryansk, Smolensk, Novgorod, Pskov, Leningrad regions, and St. Petersburg. The Avito website states that the school's credentials and contacts have been verified, and there is one positive review. The "SHUBBA-Octagon" school website (шубба-октагон.рф) was registered on February 27, 2023, with a Yandex tracker number of 92506762.

The school's website indicates that training is conducted on drones also used in the war in Ukraine. According to a post, students are taught to fly 'Mavics,' which, as a reminder, iFlight "does not supply to countries at war" (1, 2). 

Moreover, the website states that the training will help obtain the military specialty of "UAV Pilot." One of the photos depicts a drone with a missile, and the boards show weapon schematics. The drone motor is labeled 1800kv. A similar inscription is found on the XING UAV motors made by iFlight.

According to the site, the training range is located in St. Petersburg. Photos from the website were taken in the "Wagner" center, likely in St. Petersburg (1, 2). In a shot from the training center, a person in a military uniform with the calling "Saint" and a set of this military uniform next to the Syrian flag. The school's Telegram channel indicates that it employs instructors with the callsigns "Sviatoj," "Volnik", and "Yunii" (1, 2). According to one of the posts, "Saint" and "Free Man" received a state award from the Russian Federation - the "Medal for Courage" (1, 2). According to posts, "Saint" served in the Russian general staff, the Special Purpose Police Unit (OMON), and the Private Military Company (PMC) (1, 2, 3), while "Volnik" served in OMON and PMC (1, 2).

The school's legal entity couldn't be found. However, the legal entity LLC "Positron" (TOV "Positron"), associated with Yevgeny Prigozhin, has conformity certificates for DJI drones and, according to an article, imported DJI drones to Russia.

Also, according to one of the posts on the school's Telegram channel, in November 2022, a design bureau from St. Petersburg created a combat drone, "Hortensia," which became the first mass-produced FPV drone (1, 2). It's stated that by July 2023, over 2k drones had been sent to the front. Production capacity is 120 units per day and 3k units per month. A post from July 14, 2023, states that the design bureau shipped 450 drones to one of the major customers. You can order a batch directly through the bot gortenzia_fpv_bot. The post about drone production contains details resembling the XING drone made by iFlight (1, 2, 3, 4).

How are the Russians using Chinese drones in the war against Ukraine?

On June 9, 2023, the commander of the aerial reconnaissance group "Ptahy Madjara" — Robert "Madyar" Brovdi — published a video capturing the use of drones manufactured by iFlight by the Russians. "Madyar" called on the EU and the US to impose sanctions on this company.

The next day, on June 10, the company DJI released a statement (1, 2) stating that they do not sell drones to countries in war. The Ukrainian activist Serhiy Sternenko, who has repeatedly initiated and closed drone fundraisers, immediately responded to the company's statement.

At the same time, other Ukrainian volunteers reported difficulties in purchasing drones. Sometimes, drones are bought literally out of the hands of the Russians. This was mentioned by a Twitter user under the nickname cheskeradio.

According to data from the 52WMB platform, iFlight may facilitate the export of military drones from affiliated companies, such as Mavic. Furthermore, according to this platform, drone deliveries to Russia will occur throughout 2022. These deliveries were carried out by the company LLC "Aimetro" (in Russian: ООО "Айметро"). In total, iFlight conducted 1636 trade operations, the last on October 31, 2022. 1577 transactions were made with LLC "Sky Mechanics" (in Russian: ООО "Небесная механика"). Additionally, throughout 2022, the company sold drones and related components to ООО "Хаскел" (LLC "Haskel") and to the private entrepreneur Mikhail Aleksandrovich Maligaev.

In February 2023, according to an investigation by the "Wall Street Journal," it became known that despite iFlight's statements, drones secretly arrived in the Russian armed forces through collaborators in China, the Middle East, and Europe. The investigation revealed that DJI drones were transmitting data to the Russian military command in Moscow and supplying them to ground forces involved in the war in Ukraine. Meanwhile, iFlight's new policy challenged Ukraine's procurement efforts, requiring all transactions through intermediaries. While Russia faced no particular changes, iFlight created additional barriers to Ukraine's procurement.

However, the focus isn't solely on UAVs. Chinese manufacturers are actively supplying components for them to Russia.

For instance, in 2017, iFlight Technologies Co.Ltd. purchased aerial devices and video cameras from the Russian company LLC "Fora" (in Russian: ООО "Фора"). Later, in 2019, they made a purchase of 14 devices from the Russian supplier LLC "Continent" (in Russian: ООО "Континент") for a total of $5390. From November 2021 to February 2022, they bought drone components from the Russian LLC "Sky Mechanics." (in Russian: ООО "Небесная механика"). 

How are sanctioned goods imported into Russia?

One method is for Russians to establish enterprises in another country and register a company there. This newly formed company then purchases the required goods on order and re-exports them to Russia. Such companies are often opened in China or Turkey, as they have active international trade. For electronics, China and Hong Kong are predominantly used. The UAE, Kazakhstan, Kyrgyzstan, Armenia, and Uzbekistan are commonly used for company registration. If a company from Armenia ordered a large batch of goods, it would be delivered to Russia via Iran and from Iran to Astrakhan through the Caspian Sea, as there is no land border between Armenia and Russia.

The second method is even more straightforward — the customs declaration first lists a middleman logistics company during import. Then, using c/o (in care of), the actual sender, the legal entity DJI, is indicated. For instance: Helios Global Logistics (shanghai) limited c/o dji europe b.v. Furthermore, instead of the letter J, they mention L - dli europe b.v. c/o atc air service ltd. By changing just one letter, the package appears to be dispatched on behalf of another company.

In China, clients from Russia can order goods directly, as some banks accept payments from Russia. However, when there's a need to order from the US or Europe, a company is typically opened, often in Hong Kong, with a Chinese beneficiary.

Another import scheme via China involves an "owner refusal" tactic: a Chinese company orders goods from the US for itself or for subsequent dispatch to another country, receiving the goods in the ports of Shekou and Guangzhou. Upon the ship's arrival, the Chinese company may "suddenly" decide it has found another buyer, or can even reject the cargo in favour of another purchaser. Immediately in the port, this cargo is transferred to other containers, essentially facilitating a re-export to Vladivostok or Sakhalin, from where it's transported by rail to the actual buyer in Russia. It's crucial to execute this maneuver before the cargo crosses the duty-free zone before it crosses the border or leaves the port.

Is iFlight neutrality in the air?

iFlight Technology Company Limited — is a company that specializes in producing drones, such as Defender, Nazgul, Chimera7, Taurus, and Rabbitfilms. They also sell parts and components: joysticks, goggles for drone operation, chargers, batteries, and other details. Furthermore, IFlight is a pivotal player in the unmanned aerial vehicle sector and wholly (1, 2)owns another prominent drone manufacturer — DJI. They, in turn, manufacture the renowned Mavic drones. These producers are leaders in FPV production and its related components.

At the end of 2022, iFlight established a European branch called iFlight-RC Europe (1). The company representative, Patrick "Xing" Klimek, moved to Austria. One of the reasons for this move could be the legitimization of operations. In other words, by being in Europe, the company aims to gain the trust of European consumers. Or even to simplify the possibilities for re-exporting sanctioned goods to Russia.

And these are just a few examples of drones sold by iFlight. These devices combine compactness, ease of use, and advanced technology. Thanks to these drones, the iFlight company is setting a trend in the world of UAVs.

However, in the world of politics, it's a different story. iFlight claimed on June 10, 2023 (1, 2), that their drones are strictly for civilian use and that they won't sell them to countries at war. In reality, this turned out not to be the case.

De-anonymizing the leaders: the curators of the drone industry in Russia

In total, 10 legal entities were identified. In reality, there could be many more. Of those identified, 9 supplied IFlight/DJI drones to the Russian Federation in 2022-2023. These companies are LLC "Esta," LLC "Entep," LLC "Global Key," LLC "NPO "Group Avanti," LLC "Aimetro," LLC "Vozdukh," LLC "Letalnie Bezpilotnie sistemi," LLC "Nebesnaja Meckhanika," LLC "Positron" (associated with Yevgeny Prigozhin, etc.). Let's have a closer look at some leaders of these enterprises.

Numerous companies were discovered circumventing sanctions to supply Chinese drones and components to Russia during the investigation. The number of such companies is so vast that a complete list won't fit in this article. Still, we have substantial evidence of collaboration with Chinese manufacturers IFlight for each of them. These enterprises facilitate illegal imports and actively organize training courses for Russians in operating UAVs. Subsequently, these Russians are sent to Ukraine.

The role of drones in the Russian-Ukrainian war

The importance of unmanned aerial vehicles becomes increasingly evident against the ongoing conflict, where Ukraine stands against Russian aggression. However, the actions of companies that, on the one hand, declare a halt in drone shipments to the conflict region and, on the other, bypass their commitments create additional risks for Ukraine's national security.

Open data indicates evasion of drone sales bans. The situation surrounding UAVs is just the tip of the iceberg, where global companies must be held accountable for their actions and decisions in global conflicts. Ukraine deserves support, and companies playing both sides only merit international condemnation and cancellation.