181023 CNIMOKThe Guildhall information agency published an overview of active measures in the areas of military industrial sector and military-industrial cooperation in recent years, in order to attract attention of the audience to the problems of countermeasures to the hybrid threats from the Russian Federation in the spheres of production of and trade in weapon systems and military equipment. In this paper, we have attempted to describe the tools and methods used to carry out active measures, as well as analyse the goals and consequences of hybrid operations, using international and Ukrainian cases as examples.


Struggle for markets and external protection


This plot quite clearly illustrates the general geopolitical axiom, i.e. consolidation of its own influence in the world is impossible without the active promotion of the goods of national production. The United States are “exporting democracy”, Russia is unthinkable without trade in energy resources, China has generally chosen a course for large-scale trade and economic development. However, each of the key players (and underdogs like Ukraine) understands that the most important tool to fix its subjectivity in the world is the ability to arm other states. Weapons-money-power triad has dominated since ancient times. Though, arms exporters are approaching differently to its implementation, often not being limited to transparent contracting, but sailing close to the wind, or generally going beyond the legal framework and the principles of fair competition. Following his visit to Saudi Arabia in May 2017, US President Donald Trump agreed to supply weapons and military equipment to that country worth of 109.7 billion US dollars. The contract was named in the United States as the largest one-time sale of weapons in the history of the country (Riyadh ordered 150 Black Hawk helicopters, tanks, artillery mounts, armoured vehicles, coast defence ships, anti-missile systems, etc.).


US President Donald Trump and the King of Saudi Arabia Salman ibn Abdul-Aziz Al Saud in Riyadh, May 20, 2017


The Kingdom itself appreciates this as an opportunity to strengthen its position in the region, relying on the counteraction to terrorism, and Washington – as a means to reduce the burden on the United States to carry out similar operations. In addition, the deal has actually crossed over the plans of Russia, whose interests in the Middle East are articulated not weaker than those American, but the offer of Riyadh is much more modest. Naturally, Russian mass media and experts call this sale of technological weapons (such as THAAD) to soldiers who cannot operate it “backdoor bribe” and the continuation of the traditional Arab practice of “petrodollars restyling”; in reality, Saudi Arabia buys not weapons from Americans, but security guarantees and loyalty. A separate plot line was in the criticism of the military capability of the Saudi Army, which is put in a flurry in Yemen by the rebels, despite its equipment with advanced models of weapon systems and equipment. Nevertheless, Russia itself is very interested in the sale of S-400 missile systems to Saudi Arabia and is not concerned in any way with the technological preparedness of local specialists.


In July 2016, Morocco received the first 3 Abrams M1A1 of the 222 tanks to be supplied in virtue of the US military aid. In fact, on June 18, 2012, within the framework of Excess Defense Article (EDА) program, the US Defence Security Cooperation Agency issued a press release on the delivery of two hundred Abrams M1A1 to Morocco, in their configuration M1A1 Special Armor (SA), totalling to over 1 billion US dollars. At the same time, the US satisfied the request of Morocco for supply of component parts, service support, personnel training and equipment preparation. The DSCA notes that the upgrade package for M1A1 tanks will help to modernize Moroccan tank units, extending its capabilities to combat current and future threats. These tanks will help to upgrade the military capabilities of Morocco, as well as to support the further cooperation with the United States and other allies. In particular, intervention in Iraq in 2003 and the “Arab Spring” demonstrated the importance of protecting armoured vehicles in the conditions of the city guard, so that they equipped the tanks with additional protection and updated systems that affected combat operations within urban environment (almost the legendary TUSK – Tank Urban Survivability Kit).



M1A1 Special Armor Abrams at the acceptance ceremony in Moroccan Armed Forces.


The Russian media met the information with heavy criticism and expressed doubts about the feasibility of such supplies. Nevertheless, according to the DefenseBlog, Casablanca received at least 127 tanks as of August 2018.


Exports of American Abrams to Australia, Egypt, Kuwait, and Saudi Arabia (the last two countries signed new contracts in 2017 and 2016, respectively) are displayed in the plots of the Russian media and experts' comments in an incredibly negative, even disreputable, tonality. However, even this is not able to conceal the admiration in Russia caused by the ability to supply such serious equipment for targeted loans granted just before it: first, the United States grants conditional loans for the purchase of tanks to Egypt, and then supply those tanks for the same funds.


The mention of Abrams is not accidental; it is considered almost a mascot of the entire American “military-oriented industry”, but far from being the only weapon system that captures the dominant interest of Washington in the world. Moreover, it is not a manifestation of thoughtless sponsorship, as Russian experts are trying to prove and argue on numerous military portals. Free American military aid in the form of a loan or grant allows Allies to buy American ammunition, land vehicles, aircrafts, and naval vessels. It is provided to partners under the Foreign Military Financing (FMF) program and is supervised by the State Department and the Pentagon. According to the Wall Street Journal, it costs 6 billion US dollars to the United States annually. The main beneficiaries of the program are Israel, Egypt, Jordan and Pakistan. According to the official DSCA report, the volume of Foreign Military Sales contracts made in 2016 amounted to 33.6 billion dollars, including only 2.9 billion dollars within the line of direct financing of foreign armies in the form of military assistance under FMF. In 2017, it grew to 6.04 billion dollars, with total sales of 41.93 billion US dollars.


Moscow calls the sale of American weapons at the expense of the American budget a “crafty plan”, because it would not be in demand under other schemes. Accordingly, Abrams had long become an obsolete “shed” for the Russians, which is even hard to compare to Armata, but this does not blur the main idea: even free military aid meets the national interests of the United States.


And Moscow understands it pretty well, trying not to lag behind in counter initiatives. On October 2, Russian Defence Minister S. Shoigu reported to President Putin on sending S-300 anti-aircraft missile systems to Syria (a total of 49 systems). The training of the Syrian military on the operation of AAMS has already begun and should end by the end of the year, although the formation of a unified AA defence in Syria, which will unite Russian systems in Syria into a single Syrian network, should be completed by October 20. Russia decided to transfer S-300 systems after September 17, when Syrian AA defence shot down the Russian Il-20, trying to repel the Israeli attack on Latakiyah.



AAMS S-300


On the one hand, the decision seems logical and can well be justified by the official explanation of the need to protect Russian servicemen. However, 4 launchers are not enough to create a complete air defence “umbrella” over Syria, moreover, they themselves become a potential target for the attack. According to the Israeli Prime Minister, the transfer of such effective systems to “irresponsible players” only complicates the difficult situation and can cause an escalation of tension in the region. As a result, the mission to “protect national interests” can be in jeopardy, since this explicit assistance to Syria and a hidden supply of weapon systems to “L/DPR” cannot stand in line with the American FMF because of the lack of evidence of any dividends.


In addition, trying to provide protection for the products of its own military-industrial complex, Russia does not give away its concessions in other areas. Moscow had to look for an alternative foreign market against the loss of an opportunity to receive Western equipment and technologies in proper volumes as a result of sanctions and the lack of its own reserves. Its reorientation to China allowed reducing the shortage of components: the total volume of bilateral trade amounted to 84 billion US dollars at the end of 2017, and Chinese exports to Russia rose up to 42.9 billion US dollars. According to the Carnegie Moscow Centre, the Chinese MIC is less dependent on unlicensed copying of someone else's technologies and more increasingly relying on its own developments. In addition, military-technical cooperation is not significant in trade between the two countries (no more than 5% of the trade turnover), however, it plays an important political role, providing “the depth of the Russian-Chinese partnership”. Therefore, Russia supplies the best it has to the Celestial Empire; Russian Defence Minister Sergey Shoigu calls the PRC “the strategic partner of Russia”; and this is manifested even in completely civilian spheres, such as the implementation of Beijing's economic projects in the Russian-Chinese border regions in spite of the active protests of the local population.


Russia demonstrates a similar desire to keep a client in Latin America a tout prix. Since 2005 (with Hugo Chavez), Russia concluded 12 contracts for the supply of armoured vehicles, rocket-artillery weapons, anti-aircraft defence systems and other military assets to Venezuela totalling to about 11 billion US dollars, which were completed by December 2017. Instead, only one agreement has been signed with Nicolas Maduro, because the country does not have enough financial resources to purchase new weapon systems. In August 2017, Rosneft executives stated, trying to outrace each other, the increasing cooperation with Venezuela and to prove that, the corporation provided the state oil company Petroleos de Venezuela SA (PdVSA) with 6 bln. US dollars as advance payment under the contracts. One rent-seeking country buys oil in another, calling such a dubious transaction to be economically feasible. Russia would like to have a staging ground in Latin America, and not to take into account its real value and the cost of such geopolitics for the federal budget.


Under pressure from international and national sanctioning, Russia is actively trying to maintain the reputation of a trusted partner, which fulfils its obligations despite the unfavourable situation. From this perspective, the export of weapons and military equipment is positioned as the strong point of the Russian military-industrial complex and the country's industry as a whole. The second place of Russia in the rating of arms exporters only strengthens this impression, i.e. almost a quarter of world needs for military products are covered by Russian producers. According to the Assistant to the President of the Russian Federation, Vladimir Kozhin, “everyone wants to have the best, modern and effective weaponry”, therefore, many Russian partners continue to cooperate with Russia in the field of military-industrial cooperation in spite of “flat massive and cynical pressure”. The reliability of such statements cannot be verified, and this situation is beneficial for Russia, as it proves to domestic inhabitants the importance of Russian defence-oriented industry for the world.


Meanwhile, since April 2018, Russia has ceased to receive payments for most arms contracts with India, and this proves that the realization of Russian arms is not at a pace and not in a form as the Kremlin would like it to be. One of the most important export contracts in 2017 is the signing of a contract with Indonesia dated August 10, on the purchase 11 multifunctional Su-35 fighters worth 1.14 billion US dollars. Indonesia is planning to cover one half of this amount with the supply of its products (palm oil, coffee, cocoa, tea, etc.), and some other part had to be covered with a loan from an unnamed commercial bank. On October 4, 2018, it became known that under the influence of CAATSA law, Indonesia decided to postpone the purchase, as the United States did not give Indonesia guarantees not to apply restrictive measures in relation to it due to the cooperation with Russia.



“Fighters in exchange for palm oil”, an illustration from social networks


Russia's supply of weapon systems on credit or in exchange for something else applies to many states (Armenia, Iraq, Vietnam, Thailand, etc.), but is not the only characteristic of the Russian military and technical cooperation, which makes it more attractive than Western competitors. Actually, a flexible loyalty program adds some significant attractiveness to the Russian military-industrial complex. In addition to agree on promises to pay, Russia can offer the best combination of price and quality, as well as technical support in servicing and maintaining weapons and equipment already sold, and does not impose strict political and ideological restrictions.


The sale contract for AAMS S-400 “Triumph” to Turkey, worth 2.5 billion US dollars is worth separate mentioning. The head of the state corporation “Rostech”, Sergey Chemezov, calls this contract significant, as, for the first time, the NATO country has purchased the Russian air defence system. Although, the conditions for implementation are not so blameless; Turkey pays 45% in advance, and the rest will be financed by Russia's export credit for 4 years. Originally, the supply was scheduled for 2020, but the terms could be “unprecedented” shifted by July 2019, if there is a corresponding request from Turkey. If they started to transfer S-400 systems to China in December 2017, and according to Putin, the contract with Turkey was generally considered the highest priority in the military-technical cooperation, then the interests of other potential customers (Saudi Arabia, Algeria, Morocco, Iraq) have no credible evidence and may be a variation of the viral advertising.


Corruption and anti-corruption mechanisms to take in contracts


Among foreign buyers, the most popular are the products, in the development of which Russia is traditionally strong (anti-aircraft defence systems, artillery systems, tanks and combat aircrafts) and has actively used in Syria in the last three years. However, the Syrian precedent is not so indicative in this case; the emergence of Russian arms there was not the result of bilateral contracts for ready cash, but due to an initiative of the Kremlin, looking for a way to consolidate its position in the Middle East in contrast to the growing influence of the United States and Turkey. Possibilities to strengthen the Russian situation in the region outside of Syria are relatively weak, and their application is impossible without undisguised lobbying.


In particular, the visit of the Prime Minister of Lebanon Saad Al-Hariri to Moscow in November 2017 was positioned as a serious step towards deepening military-technical cooperation with Russia. It was expected that an agreement on the supply of Russian weapon systems (in the amount of 1 billion US dollars to be paid for 15 years without interests) would be signed, Lebanese airspace for Russian aviation would be open, permission for the use of ports and airbases would be granted, and exchange of intelligence information, training of Lebanese servicemen by Russian troops and cooperation in fighting against terrorism would be established. However, the relevant agreements remained just a theoretical concept through the influence of the United States and the West on the Lebanese government, according to Russian media. In fact, it is most likely that Russian lobbyists failed their work: the main advocate for the Russian-Lebanese rapprochement is the president of the Union of Mediterranean Confederations of Enterprises, the honorary consul of Russia in Lebanon and the head of the Lebanese-Russian Business Council Jacques Sarraf. In addition, Lebanon is mostly outraged at the delay in signing agreements with Russia by Hezbollah's representatives, who directly speak about the need for Russian weapons and “air defence umbrella” (air defence systems and combat aircrafts) in exchange for establishing Russian naval and air bases. The parliamentary elections in Lebanon in May ended with a strengthening of Hezbollah's position, which, generally, could affect the strengthening of the Lebanese coalition with Iran and Russia, and possible Russian military supplies will shift from political corruption and lobbyism to the category of the real policy of the new government.


At the beginning of 2018, the Assistant to the President of the Russian Federation in issues of military-technical cooperation, Vladimir Kozhin, boasted that military-technical cooperation with Russia has not lost its attractiveness even after the introduction of international sanctions. Particularly, it works with individual partner countries of the USSR under the former Warsaw Pact, which are now NATO members (such as Bulgaria or the Czech Republic) or which concentrate mainly on military-technical cooperation with the Alliance, without pretending to be permanent members (having their Individual Partnership Action Plan with NATO – IPAP, as Serbia). In addition to the explicit component (contracts on helicopters with the Czech Republic and Bulgaria, supply and servicing of MiG-29 aircrafts in Serbia), the MTC with these countries is characterized by certain corrupt schemes, too.


In October 2014, Federal Military-Technical Cooperation Service (FMTCS) of Russia reported on the fulfilment of its commitments and the supply of 63 Mi-17B5 helicopters to Afghanistan under the terms of the agreement with the United States concluded in 2011. The corresponding plot in the Russian media was presented as the statement of exceptional reliability of the country as a trading partner despite the introduction of sanctions and the suspension of MTC with Russia. In 2016, four helicopters were to be repaired, but restrictions imposed on Russia made it impossible to conclude new direct contracts. The relevant agreements were entered into through a third country – the Czech state-owned enterprise LOM-Prague controlled by the Czech Ministry of Defence, received a contract for the repair of Afghan helicopters under the orders distributed by the NATO Support Agency (NSPA). Since the repair works, the supply of spare parts and components to those helicopters are to be carried out in accordance with the contractual obligations of the Czech company before Rosoboronexport JSC, the involvement of the helicopter developer (Mil Moscow Helicopter Plant) was obligatory.


In addition to the apparent violation of the sanctions regime, the Czech Republic launched a scandal over the violation of the procurement procedure by the Ministry of Defence, as bypassing the licensing department of the Ministry of Industry and Trade, the Ministry of Defence clearly exceeded its powers.



Mi-17B5 Afghanistan Air Force


Russian media interpreted the news in their own way; according to their interpretation, NATO chooses Rosoboronexport as the main tender executor, and the Czech company is assigned a purely auxiliary role of a communicator. From this point of view, the situation acquires even more vivid propaganda outlines, as if the Alliance cannot do without the services of its main political opponent, and sanctions actually only help the Russian producers.


This situation reminds the scandal in 2013. US Air Forces Colonel Norbert Verges, a responsible officer of the unit for repair and maintenance of non-US helicopters, granted a contract for major overhaul and modernization of Mi-17 helicopters in Afghanistan to the Lithuanian subcontractor Aviabaltika Aviation Ltd., belonging to the Russian millionaire Yuriy Borisov. The investigation revealed the squandering of budget funds and other corruption offenses, which cost this officer of his military rank in 2016, he lost his job and received 5-year suspended sentence. As a result, the United States decided to refuse to use Mill's helicopters, preferring their own Black Hawk UH-60A. Czechs and Slovaks, trying to get rid of Russian-made helicopters, followed a similar way, because of the lack of a civilized mechanism to maintain the airworthiness of aircrafts despite all the ambitious statements of Russian Helicopters JSC.


In March 2018, in his commentary to the Foreign Policy Magazine, the former counsellor of the State Department and Defence Secretary at George Bush's Administration, Christopher Harrison, drew attention to the main sponsors of Czech President Z. Zeman, in particular, to the “weapon baron” Jaroslav Strnad and the Slovak oligarch with Russian roots, Alexey Belyaev, connected with Russian millionaire and Putin's summerhouse neighbour, Vladimir Yakunin. The companies of Strnad and Belyaev were caught in a massive purchase of old Chinese-made ammunition from Albanian military warehouses, which could only be sold in the turbulent Middle East, Afghanistan or in some African states. The Corruption and International Crime Study Centre finds that such a fact of purchasing this ammunition shows how it is easy and unobtrusive to enter into large agreement on the sale of weapon systems in the heart of Europe.



Jaroslav Strnad and Alexey Belyaev


Another significant episode of the informal activity of Strnad in the arms market is the supply of Czech howitzer weapons and multiple rocket launchers to Azerbaijan in April 2018. Such trade contradicts to the NATO arms trade policy, but it is in accordance with the Russian “divide and conquer” style. Declaring the support of Armenia in the Nagorno-Karabakh conflict, Moscow does not really want any party to win – the phase of a frozen or lukewarm conflict is more beneficial to Russian national interests in the region.


At the same time, Russia is not ready to lose Azerbaijan as its market, therefore, it is quite natural to use the tools of information manipulation, referring to unfair competition and dirty games against Russia played by other states. In particular, on the part of Belarus, for which Azerbaijan is the main buyer of arms. So, in February 2018, holding his speech at the meeting of the Security Council of the Republic of Belarus, President Lukashenko expressed his claims to Russia regarding its blocking of the processes of rearmament, military modernization and strengthening of military-technical cooperation under the CSTO. And already in March, some Belarusian media published and disclosed the data on Azerbaijan's dissatisfaction with the purchase of low-quality weapon systems in Russia, the problems with ammunition to Smerch MRLs and to BTR-82A machine guns, as well as with frequent breakdowns of Mi-35 helicopters. In addition, in April, the Russian newspaper Kommersant reported the intention of Belarus to start implementing an export contract for the sale of 10 MRL Polonez to Azerbaijan. The development of this launch system has become the Belarusian reaction to Russia's refusal to support it with its own missiles (first of all, with Iskander). In response to a possible Belarusian-Azerbaijani contract, pro-Russian media and experts call MRL Polonez a copy of the Chinese analogue.



MRL Polonez



At the same time, supply of lethal weapon systems to Azerbaijan contradicts the recommendations of the PACE passed in 1992 concerning an appeal to members of the Council of Europe not to supply weapons to the zone of the Karabakh conflict. However, Russia has a bilateral agreement on military-technical cooperation with Azerbaijan, which is why, it is not going to adhere to the recommendations of the PACE. Moreover, it has long been clear that the actual primacy of national legislation against the norms of international law has been established in Russia.


Traditionally being objectified by the Kremlin as a stable field for the activities of Russian producers of weapons and military equipment, Bulgaria is struggling to balance between Moscow and Brussels, adjusting the priorities for rearming its own armed forces in favour of Russian sellers or producers from NATO countries, depending on a need and the current political situation. The Bulgarian defence industry specializes in light rocket and artillery systems and small arms for “unconventional wars of low intensity”. At the same time, the most expensive segment of the defence sector in Bulgaria is aviation, which is typical for NATO countries.


The main role in the process of this re-equipment is played by the state-owned plant Avionams AD, which until 2016 belonged to the main Bulgarian oligarch Tsvetan Vasiliev. Having been accused of corruption, he fled to Serbia, but did not hold out a hope of a triumphant return home, although, as a result of the owner's influence, the plant did not update the line for repair of aircraft equipment and retained its orientation towards Russia. Avionams AD perfectly illustrates the dual nature of the Bulgarian defence industry: NATO membership allowed it mastering the technology of repairing equipment according to NATO standards, but in practice it helps to consolidate the Russian production of aircraft in the national market, since the plant is bound by agreements with Rosoboronexport. Just like the Czech LOM-Prague, it took part in scandalous tenders for the repair of Russian helicopters of the Afghan Armed Forces funded by NATO in 2016-2017.


According to “Hvylia”, Bulgarian President Rumen Radev advocates the provision of Air Forces with Swedish fighters Gripen, and Prime Minister Boyko Borisov – to transfer the Avionams plant to the sphere of influence of Rostech, UAC and “MiG” for the serial production of modernized Russian MiG-29 fighters. It should be noted that the implementation of this plan is hardly likely, as Russia will not settle for the localization of one of the strategic directions of its aviation production in the country that is a member of NATO. However, this is more than enough to consolidate its monopoly status on the Bulgarian market.


Repair of Soviet aircrafts was interesting for Poland, as well; in 2015, the parties even reached agreement on 10 engines for MiG-29 fighters, which would cost Bulgaria12 million euros cheaper than Russian service. MiG Corporation reacted negatively, stressing that Poland did not have a license to repair Russian engines. Nevertheless, in February 2017, the new leadership of the Ministry of Defence abandoned the contract with Poland and continued to cooperate with the Russian corporation.



Mig-29 of the Bulgarian Air Forces in maintenance


At the end of 2017, Ukrainian SE “Ukrinmash” objected to the intention of the Bulgarian Ministry of Defence to conduct a tender for the repair of Bulgarian fighters with the participation of only Russian aircraft building corporation “MiG”. The signs of the monopoly conspiracy were confirmed against the background of the assessment of complaints made by the pro-Russian Minister of Defence Krasimir Karakachanov (Ukrainian Sabotage Case). In the end, the case ended in a predictable way; the Ukrainian objection was rejected, and Bulgaria chose “MiG” for thorough overhaul of 15 Soviet fighters up to 2022, amounting to 81.3 million levs (51.45 million US dollars). The contract was announced in March 2018. The official position is extremely simple; Bulgaria believes that only the Russian company is capable to repair qualitatively MiG-29 fighters supplied during the Soviet era, and, therefore, it did not invite other participants. In conjunction with the fact that Bulgaria plans to buy eight new fighters in one of the NATO member states, the continued use of Soviet aircrafts suggests that the balancing policy between Alliance producers and Russian repairers will continue.


And all this despite the fact that Bulgarian troops do not share such diversification. In particular, in October 2017, pilots of the air force base Graf-Ignatievo of the Bulgarian Air Forces refused to operate on Soviet-Russian MiG-29 fighters for security reasons, as there was documentation for refurbished engines and aircrafts were in poor technical condition. UAC called the strike “a continuation of the displacement of the Russian manufacturer from the Bulgarian market”, although the actual state of affairs proved the opposite.


Russia constantly complains about the use of unfair competition methods against it under the guise of international sanctions, which, thus, unleashes (informally) her hands in the implementation of mirror actions. In fact, corruption schemes, illegal and uncivilized lobbying, and other non-competitive fighting methods have become the characteristic feature of the Russian military-industrial complex and its export component even before the annexation of the Crimea. On the contrary, corruption in this area is a natural state, in which all the processes in this area take place in Russia without any exceptions.

A special means to strengthen its position in the arms market implemented by Russia is a kind of “anti-corruption struggle”, i.e. the Russian Federation provides with unofficial support and assistance in disclosing and investigating tenders with collusive corruption, in order to take their implementation afterwards. On July 29, 2016, the Ministry of Defence of India and Rosoboronexport signed a contract for the repair and modernization of 10 anti-submarine helicopters Ka-28 of the Indian Navy. Achievement of the agreement became possible after a scandal with the Italian company Finmeccanica (won the tender in 2010 for delivery of 12 helicopters of the VVIP class as a result of a bribe) and the cancellation of all contracts with the company by India. In parallel, Rosoboronexport may become the main supplier of heavy torpedoes for equipping six Kalvari diesel electric submarines, which became possible due to the same scandal.


On February 21, 2018, the Ministry of Defence of India published its “banned list” of foreign companies (from Israel, Singapore, Great Britain, Switzerland, Italy, South Africa, etc.), the cooperation with which was completely suspended or limited in time, or function-wise, for participation in corruption schemes or illegal behaviour while supplying the weapon systems to the Indian Army. Most of them were Russia's main rivals in the Indian market, but it was not possible to prove the involvement of Russian departments and agencies in creating this “banned list”.


The case of military tankers purchased by the Indian Navy at the Italian shipyard is also interesting in this regard. Vessels capable of transporting ship and aviation fuel, as well as drinking water, should have become a key acquisition of the Indian Ministry of Defence. Applications for participation in the appropriate tender worth 300 million US dollars submitted three countries in 2005: Russia, South Korea and Italy. The last one won. In December 2013, accompanying the aircraft cruiser Vikramaditya from Russia to India in the Atlantic Ocean, one of the refuelling tankers received a visible damage to its skin during a storm (two four-inch cracks) that was quickly eliminated in Lisbon. The “investigation” revealed collusive corruption, in which only one company, the Italian shipbuilding association Fincantieri (an enterprise with over 200 years of history), could become a supplier of warships, although, according to Russian “Nezavisimaya Gazette”, only Russia was prepared to build ships from high-strength steel for military vessels. Contrary to the news of the Russian media, the Indian-Italian scandal did not happen; moreover, the completion of the first Indian aircraft carrier Vekrant is being completed with the involvement of technologies of the same Italian company. In fact, the investigation became known only in 2016, when almost dominant positions of the Russian military-industrial complex at the Indian market were threatened by weakening due to the activity of Ukrainian and other defence companies.


The pressure of the international community as a tool to terminate the MTC


On September 17, Amnesty International called on Spain to stop delivering weapons to Saudi Arabia due to the “threat of becoming an accomplice to war crimes in Yemen”, which would inevitably occur, if it continued to sell weapons to the Arabian coalition. The key argument of human rights defenders is the inadmissibility of the priority of financial interests over protecting the civilian population.


The civil war in Yemen has been lasting since August 2014, but the most active phase of the confrontation between government forces and rebellious Houthis started after the invasion of the Arabian coalition in March 2015. Amnesty International Deputy Director Global Issues, Steve Cockburn believes that after more than three years of bloodshed, “there is no way to justify Spain or any other country that continues to arm the Saudi-led coalition”. During 2015-2017, Spain supplied Saudi Arabia with arms (aircraft spare parts, UAVs, artillery shells, etc.) for 932 million euros and issued licenses for supplies amounting to more than 1 billion euros, and in 2018 it has agreed to build five corvettes for Saudi Arabia worth 2 billion euros.



Steve Cockburn, Amnesty International Deputy Director Global Issues


Similar accusations have been heard over the last two years towards France, Switzerland, Belgium, and the United Kingdom – a total of 22 states that sold Saudi Arabia weapons, which could have been used against civilians in Yemen. At the same time, Amnesty International's findings are based on data of Stockholm International Peace Research Institute (SIPRI), which do not always reflect reality and often contain a disclaimer in a “it's not exactly” style.


It is surprising that the approach taken by human rights defenders is selective, as on October 1, Germany approved the supply of military goods to Saudi Arabia for 254 million euros, despite its promises not to sell arms to the countries involved in the conflict. On September 12, the White House announced that Saudi Arabia and the United Arab Emirates took “obvious measures to reduce the risk of harm to civilians and civilian infrastructure”, thereby expressing approval for continued supply of weapon systems from the United States. Moreover, the civil war in Yemen is not the only armed conflict on the planet.


The situation is interesting, because in early September Spain has already cancelled the delivery of 400 laser bombs to Saudi Arabia on the background of fears that the weapons could be used against rebels in Yemen. Despite the fact that the agreement was signed back in 2015 by the former government of Spain, the new leadership plans to return EUR 9.2 million paid by Saudi Arabia. A rather unpopular measure that spoils the reputation of the country was the result of criticism made within the realm of Weapons Under Control Campaign, aiming at stopping the sale of weapons to Saudi Arabia. The organizations of this group (Amnesty International, Greenpeace, Oxfam, FundiPau) also seek to stop the export of weapons to Israel, which seems to be a fantastic and completely unrealistic goal.


The Russian mass media actively took up the case, and it became straightforwardly conspiratorial. They called Saudi Arabia and UAE joining the war the confederacy to divide Yemen within the framework of the so-called New Middle East project developed by the United States-led West countries. Accordingly, only an independent world community can counteract these plans. At the same time, similar accusations in 2007 by the same Amnesty International towards Russia regarding the illegal sale of weapons in Sudan, and those weapons appeared later in the Darfur conflict, were rejected by Russia as unreliable.


Amnesty International was also involved as to the attack on Ukraine. At the end of September 2017, it presented its report that revealed the involvement of Ukraine in the illegal supply of weapons to Southern Sudan, where it was “used to kill thousands of civilians”. The state-owned company “Ukroboronprom” immediately denied this information. Later, Amnesty International acknowledged that it had taken the intention to supply for the fact of the implementation of supplies.


In parallel, the Organized Crime and Corruption Reporting Project (OCCRP) disclosed the results of the study, accusing Ukraine of “weapons laundering”, i.e. the transfer of arms and military equipment from Europe to “unstable African and Middle Eastern countries” (Ethiopia, Chad, Uganda, Burundi, South Sudan). The pro-Kremlin media and expert environment joined into the distribution of this information, accompanying it by their own comments. As a result, Ukraine was depicted as the centre of the criminal scheme, which also involved Poland, Slovakia, Bulgaria, Hungary, Romania, Moldova and Bosnia and Herzegovina.



Screenshot from the Ukrainian Internet media “Ukrainska Pravda”



The involvement of European states in promoting “internal repression, aggression and instability” in Africa with “indulgence to Ukrainian whims” became the main idea of the information campaign of Russian and pro-Russian media. It is noteworthy that in October 2017, the same OCCRP published a report on the financial assets of the immediate environment of Putin, but this no less resonant information did not get proper coverage in the pro-Kremlin media. As well as the fact that Putin was awarded the “Man of the Year 2014” title; the Centre awards the “title” to persons, whose actions generate organized crime and contribute to strengthening its position. The synchronous appearance of serious allegations against authoritative international organizations suggests the paid-for nature of the campaign to discredit Ukraine and its displacement from the arms market, which would be beneficial for Russia.


We should not underestimate the efforts of international organizations in this direction, as their reports or ratings often closely correlate with general public moods or exercise a direct influence on them. In fact, in 2015, OCCRP called the Prime Minister of Montenegro, Milo Đukanović, the “Man of the Year” for the “establishment of an atmosphere of political intolerance, over-abusing and large-scale money laundering that exhaust the economy of the country”. Furthermore, the editor-in-chief of the OCCRP, Drew Sullivan, put the sign of equality between the regimes of Đukanović and Putin. Surprisingly enough, but the award of the title almost coincided with the massive demonstrations in Montenegro against the country's entry into NATO, which could be blocked by bringing down the current government and causing a political crisis. Russian meddling efforts were traced both to the organization of public riots, and to the attempted murder of Đukanović in November 2016 by the “nationalists” of the pro-Russian general Bratislav Dikić.


Russia's hybrid operations against Ukrainian military-industrial complex and military-technical cooperation


In May 2018, the experts from the British Royal Institute of International Relations (Chatham House) published the results of a study that, by 2027, Russia would be able to protect its own territory and support small campaigns abroad, but would be strengthless once conflicting with better equipped opponent. At the same time, given the existing economic constraints, there can be no talks of defence-industrial production on a scale commensurate with the arms race. The American journal “The National Interest” notes that during the years 2018-2027, the state of the Russian Armed Forces will improve not due to the use of modern weapons (Armata, Su 57, Yasen-class submarine), but as a result of modernization of Soviet models of equipment (T-90, Su 27, S 400, Iskander, Improved Kilo). After the annexation of the Crimea, Donbass aggression, sanctions, breach in MTC relations with Ukraine, Russia was in a situation where the implementation of previously signed contracts was slowed down or made impossible under the influence of scarcity of components and technologies. As a result, without being able to offer a massive quality product to the world, Russia chose the only available option, i.e. trying to discredit its competitors using a wide range of hybrid means.


In a situation where the arsenal of Russian influence is objectively not enough to counter other arms export monsters (the USA, France, Germany, and China), the main object of the Russian attack is Ukraine as geographically and politically the closest rival; Mostly due to largely similar export product nomenclature, both countries rely on the same target audience. Accordingly, all projects and contracts in the present conditions are considered through the use of the “win-lose” strategy. The toolkit for its implementation by the Kremlin is diverse enough to have no doubts that Russia will try to resist the entrance of Ukraine into new markets.


According to the head of the Defence and Security Committee of the Federation Council, Viktor Bondarev, 112 Russian soldiers were killed in Syria over three years, Russia lost 8 planes, 7 helicopters and several BTRs. For comparison, the senator cited statistics of Soviet losses in Afghanistan over the same 3-year period (nearly 4,800 troops killed, at least 60 tanks, about 400 armoured personnel carriers and infantry fighting vehicles, 15 aircrafts and 97 helicopters lost) and the American losses during the Iraq war in 2003 – 2006 (lost 2,309 troops killed, 10-20 Abrams, dozens of armoured personnel carriers, at least 50 Bradleys, 15 aircrafts and about 80 helicopters). The Russian Armed Forces are dignified in the most favourable light, though in a sufficiently manipulative way (comparison of different armies in various conflicts), together with the whole Russian military-industrial complex, since modern warfare requires modern weapons.


In contrast, Russia presents the long-drawn-out conflict in Donbas as a logical outcome of inefficiency of the Ukrainian Armed Forces to overcome the resistance of yesterday's “miners and tractor drivers”. Russian voicers extrapolate similar conclusions onto the Ukrainian military-industrial complex, i.e. the weakness of the army is a logical consequence of the ineffectiveness of the enterprises of defence industry, which products do not benefit at the domestic front, and, therefore, should not be interested for potential foreign clients.


On May 21, during a working visit of the Prime Minister of India, Narendra Modi, president of the Russian Federation Vladimir Putin recalled “a very tight contact and good interaction between the military agencies” at a high strategic level. In his response, the Indian colleague limited himself to general statements about the importance of his country's cooperation with Russia and to his personal enthusiasm with Putin. It is possible that agreements on military-technical cooperation were concluded during further communication. However, ignoring this area of cooperation in the public part of the meeting can signal India's attempts to avoid any damage to relations with the civilized world, with which its hopes for re-equipment of its arsenals are equally connected. The Indian government is wary of dealing with the Russian Federation because of the likely risks of such cooperation for the Indian-American rapprochement in the field of military-technical cooperation that has been observed in recent years. It happened that India has been the largest importer of weapons in recent years with its 1.5-million regular army. If the implementation of the Indian Production Program is an objectively challenging task and is designed for decades, the diversification of weapons and equipment imports is already underway. Naturally, such a turn of events does not suit the main Indian supplier.



Prime Minister of India, Narendra Modi and Russian President Vladimir Putin, Sochi, May 21, 2018


The bilateral relations that exist between Russia and India today are characterized by largest indicators of supply of arms in the world. According to the Stockholm International Peace Research Institute (SIPRI), during the years 2011-2016, India acquired weapons of Russian production for 13.4 billion US dollars. Accordingly, Russia is particularly sensitive to the attempts of other countries to encroach on the Indian weapons market. In response, it does everything possible to ruin the reputation of its competitors.


Case 2016, when Ukraine offered India its services in the field of modernization of Soviet aircrafts following the results of the Defexpo India-2016 exhibition of arms and military equipment, confirms this in a clear manner. Russian and some Ukrainian mass media actively published the articles of Jutarnji Vijesti newspaper that Croatia wanted to return to Ukraine four unserviceable MiG-21 fighters purchased in May 2014 and replace them with serviceable ones. An investigation of Croatian military police revealed the presence of old spare parts from Bulgaria and Algeria in the modernized aircrafts, which was not stipulated in the contract. The state-owned company Ukrspetsexport responsible for the contract denied the allegations, referring to the lack of official claims of the Croatian party, however, an attack on Ukrainian reputation was launched. Moreover, it periodically gained intensity up to the beginning of 2018 and it will clearly be used again as an element of Russian dirty games in the future.



Test flight of MiG-21 over Odesa piloted by Croatia's best pilot Ivan Selak


The value of the contract with Croatia was 13-16 million euros, and it was definitely cheaper than other offers (ones from Rosoboronexport, Israel, the USA, Romania), so it was entered into. Moreover, the Croatian inspection board scrupulously inspected aircrafts in hangars and arranged flight tests for them. “Changed” numbers and other significant deficiencies could already be noticed at that stage, but the agreement got the green light and was subsequently successfully implemented. The configuration of the attacking part in this information campaign against Ukraine is also of interest: the flagship is the leftward Croatian newspaper, and the Serbian and Russian mass-media were the satellites. The intensity of the discussion was different and depended on the concurrent events: in 2016, the Indian arms exhibition served as a trigger, in 2018 – a visit of the Minister of Defence of Ukraine S. Poltorak to Croatia who agreed with his foreign colleague on the expansion of bilateral cooperation in the field of defence, military-technical cooperation defence industry and training of military personnel.


As a result, the main beneficiary of criticism of “Ukrainian unserviceability” was Russia and the company “Helicopters of Russia” won the tender for the thorough overhaul of 10 Mi-171H helicopters announced by the Croatian Defence Ministry. A more far-reaching result was the Ukraine's loss of next contract worth nearly 50 million US dollars only in Croatia, not to mention the failure to sign potential agreements with other states of Central and Eastern Europe.


The situation is simultaneously unpleasant in several dimensions. First, the reputation of Ukraine as a reliable partner, which plays an important role at the market of armaments and military equipment, has suffered. Secondly, Russia's benefit suggests that journalistic or official investigations, disclosure of materials, and a large array of other information events that took place was not a coincidence. Most of enterprises of the Soviet defence industry remained in Russia after the collapse of the Soviet Union, but the second largest military-industrial potential was in Ukraine. Since then, Ukraine's successes in the global arms market are extremely painfully perceived in the Russian Federation. Moreover, the Croatian case was not the first proof of the Kremlin's willingness to enter into new or maintain its former markets, without concerns for the principles of fair competition.


There was the same scenario concerning the events in relation to the Iraqi contract of 2009 for the supply of 420 BTR-4, tanks and aircrafts, totalling about 2.5 billion US dollars, which was the largest agreement in the history of independent Ukraine. Already in 2012, Iraq reported defects in supplied armoured personnel carriers (cracks in shells, problems with regular armaments and engines, and other significant disadvantages), and refused to accept another shipment in the spring of 2013. After the breach of the agreements, Russian defence industry companies producing BTR-82A were able to take this free niche on the armaments market. Both of the mentioned vehicles were ranked among the world's top 10 armoured personnel carriers in 2013 in terms of protection, firepower and mobility, according to the Army Technology Magazine. In addition, Russian experts constantly criticized domestic designers for the fact that advanced technology that met NATO standards was produced in Ukraine, being poorer than Russia. The then existing state of bilateral relations had not yet anticipated an openly aggressive commentary and an open anti-Ukrainian information campaign. Since 2014, the situation has changed: Ukrainian technology has been mercilessly criticized, and all more or less significant contracts of Ukraine with other states have been subjected to constant attacks, which often led to their breach.





The same BTRs were the subject of an information campaign in April 2017, when the authoritative Russian blog BMPD, referring to an article in the American magazine “Jane's Defense Weekly”, informed of the intention of the Indonesian Marine Corps to cease further purchases of Ukrainian BTR-4 under the contract signed in early 2014 between “SpetsTechnoExport” and the Indonesian Ministry of Defence. “Ukroboronprom” called this information another fake of the information warfare and was forced to prove the absence of any claims from international partners regarding the quality of armoured vehicles. Nevertheless, the appearance of such articles and news spreads rapidly among global players at the defence market and leads, at least, to a cautious attitude towards the Ukrainian military-industrial complex and, to put it mildly, does not contribute to the new orders of BTR-4 by potential clients from other countries.


If in such cases, Russia becomes a direct beneficiary from Ukrainian problems, therefore, it is directly interested in their occurrence, however, in other cases, it seems to be an outsider observer, but de facto is the most interested party in causing losses to Ukrainian competitors. Scandals related to the supply of aircraft parts to India by Ukroboronprom, the implementation of agreements with the countries of the Middle East and the payment of funds to foreign companies under agency agreements during 2016-2018 have become the subject of consideration and opening of criminal proceedings by NABU detectives. “Nashi Groshi”, Marlin Project, “Novoe Vremia” and “Ukrainska Pravda” write and speak about corruption schemes involving high-level officials of the Concern and the state. The collision of two state agencies, each of which formally pursues the realization of national interests (NABU – fighting against illegal activity; Spetstechnoexport – ensuring and maintaining the reputation of Ukraine in the market of weapons), actually led to a blow to Ukraine. In addition to discrediting in the context of potential conclusion of important agreements in the field of military-technical cooperation, Ukraine lost the contract for the supply of equipment for aircrafts to India for 26 million US dollars, and the amount of losses may increase as a result of the possible entry of Ukraine into the Indian “banned list” of suppliers of defence products (precedents for obtaining a “ban” by German or Italian suppliers indicate the seriousness of such a result). With such a scenario, Rosoboronexport will highly probably become the “heir” of Ukrainian contracts in India.


Russia can use a wide range of fake news to discredit Ukraine as a partner in general, and the unreliability of the Ukrainian leadership in particular. The plot of Ukraine's support of the military-technical cooperation with Russia, contrary to statements of Ukrainian politicians about the warfare, occupies a prominent place in this set of fakes, since it allows the Kremlin to operate with additional arguments to deny aggression against Ukraine, to raise its own reputation in the eyes of potential buyers (“Russia fulfils its obligations in spite of situational allegations and unfair sanctions”), while understating the reputation of Ukraine (“Kyiv is just using the fact of its neighbourhood with Russia to cover its carrying out genocide of its own population in Donbass, although it cannot go without cooperation with Moscow”).


The argumentation of this position is based on SIPRI reports, which say that Russia, China and Thailand were the main clients of Ukraine during 2013-2017. In 2017, the plots about military-technical cooperation with Russia published in the Ukrainian media led to a series of scandals. The problem is not so much in the significant dissonance of the published data with the assurances of the authorities and the realities of the situation (well, Ukraine should not actively trade with the country officially called the aggressor), but in spoiling the image of official Kyiv in the eyes of the world. It is also about relations with the closest neighbours and the EU and NATO countries, as well as about the reputation of the Ukrainian military-industrial complex on the far horizons.


In fact, the databases of the Stockholm Institute contain remarks that make it possible to doubt the correctness of the conclusions formulated and then distributed by the media. For example, the table devoted to the arms trading between Ukraine and Russia for the period from 2014 to 2017 shows that engines for the Russian Yak-130 aircrafts “have been probably delivered to the Russian producers prior to the moment Ukraine had stopped export operations with Russia”, the same with gas turbines for power units of three frigates of Burevestnik class or for Admiral Gorshkov frigate. The significance of these ships for the Russian Navy has been repeatedly confirmed by statements of the Defence Minister Shoigu and personally by President Putin, therefore, obviously, SIPRI has also counted them in interim its conclusions as arguments in favour of the importance of the Russian-Ukrainian MTC.


Russia promptly reacts to any plots in the realm of the Ukrainian defence technological process, tendentiously interpreting absolutely all news. In April 2018, “Novoe Vremya” published information on the contracts signed by the main defence agency in 2016-2017 for the delivery of infantry fighting vehicles by the Zhytomyr Armour Repair Plant from Poland. According to the magazine, our western neighbour originally bought them in the Czech Republic, and then resold to Ukraine at an overvalued price, which added also the cost of the works of Zhytomyr Armour Repair Plant. As a result, the Ministry of Defence spent at least UAH 40 million, 10 times overpaying.


In response to the publication, National Security and Defence Committee of the Verkhovna Rada of Ukraine appealed to the Security Service of Ukraine to inspect the disclosed information on the existence of state secrets in them. “Ukroboronprom” made a rebuttal in general, calling the information to be “manipulative, false and undocumented” and accused the magazine of distorting the facts and the lack of fact-checking at the stage of preparation of the material.



Journalists themselves were able to check the quality of BMP-1AK during the press-tour


As a result, it does not matter whether the accusations were valid, since the damage has already been done: the process of granting export licenses from European countries, for which Ukrainian companies have fought for a long time, was postponed indefinitely, and public disclosure of counteragents puts them at risk of additional pressure from Russian politicians and pro-Russian lobbyists in European institutions.


Publication of the CyberBerkut hacker group at the end of 2015 attributed to similar effects; this group is famous for its attacks on the official online resources of the Ukrainian authorities, and these publications were about the sale by Ukraine of high-explosive bomb of Soviet production and anti-aircraft systems Pechora 2D to Qatar, as well as an anti-aircraft platform ZU-23-2 to Saudi Arabia through a Polish mediator. This allowed the “hackers” to assume the soon appearance of weapons in Syria in the hands of the ISIS and for Russia to accuse of bombing the civilian population. In February 2018, the same group released fake information about Germany's secret sale of Soviet infantry weapons and ammunition from Spetstechnoexport for more than 31 million euros, so that it emerged then “in the hands of militants in the Middle East and North Africa”. In general, most CyberBerkut publications contain unsubstantiated statements, falsified documents and other unconfirmed evidence that does not prevent pro-Russian mass media in the CIS and the EU from actively copying them to discredit Ukraine.


As a successor of the USSR, Russia set the image of the main exporter of Soviet-style weapons and mercilessly exploited it. However, other post-Soviet republics have the same potential, for which, in this case, a supporting role is assigned. The REGNUM news agency often uses the statement “the remnants of the Ukrainian military-industrial complex periodically modernize the old Soviet weapons systems and passes off them as new models of military equipment of Ukrainian production”. Without being able to directly influence the development and production process, Russia was engaged in advance damage to its reputation and the creation of a negative image for the manufacturer. Russia disparagingly calls the Ukrainian mortar “Molot” a bad copy of the Soviet mortar “Saney” (and also a logical defeat of the defence production, which can only kill its own soldiers), antitank grenade launcher “Lanceia” – a copy of “Spys”, and tanks and armoured personnel carriers as inadequate modernization of obsolete Soviet vehicles, etc.


On January 25, 2017, at the request of the Bangladesh Air Force Command, Ukraine opened a service centre for major repairs, refurbishing and modernization of Mi-8 / Mi-17 helicopters. Russia's position on this case can be regarded as a classical against all other examples of the intersection of the interests of Ukraine and Russia in the struggle for contracts related to the repair and modernization of Soviet-made equipment. Russia insists that only “Helicopters of Russia” has a certified right to perform such works, while modernization performed by Ukraine does not grant any guarantee to the Republic of Bangladesh (or another country) for further use, the maintenance of crafts and lives of pilots. And this is the easiest form of blackmail, with which Russia camouflages its desire to perform agreements reached by Ukraine.


On the condition of increasing competition at the world market of armaments and in virtue of weakening of its own positions, and Russia is resorting to the tactics of a wide range of hybrid measures, where misinformation remains the most effective. These measures aim at breaching specific contracts or areas of military-technical cooperation, discrediting Ukraine as a reliable partner at the world market, forming a negative attitude of Ukrainian society towards the products of the domestic military-industrial complex and its export potential, etc. Media and non-governmental organizations, including international ones, prevail among the instruments used by the Russian Federation to promote its own messages and narratives.


Taking into account the above-mentioned factors, the necessary task for Ukraine, as a natural competitor of the Russian Federation on the world arms market and the state, against which Russia is conducting military operations, is to create mechanisms to protect its own military-industrial complex and areas of military-industrial cooperation with other countries against hybrid attacks of the enemy. The main tasks in this direction are the early detection of such attacks, and such reaction combined with a rapid response will allow curtailing them at an initial stage, and we also need a proactive position that will force the enemy to reorient resources to solve its own problems.


You can find this article in Ukrainian here: ГІБРИДНІ АТАКИ КРЕМЛЯ НА СВІТОВОМУ РИНКУ ОЗБРОЄНЬ

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