Caterpillar and Zeppelin Assisted Russia in Evading Sanctions

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 Caterpillar and Zeppelin Assisted Russia in Evading Sanctions

International companies Caterpillar and Zeppelin International continued to profit during the war by selling construction equipment to Russia.

According to Russian customs statistics, new excavators, bulldozers, and bucket loaders were imported, notably through the ports of Kotka, Helsinki, and Hanko, as well as through private companies in Armenia.

According to customs statistics, from February 2022 to February 2023, a total of 270 new machines were exported to Russia through Finnish ports. This information comes from a series of journalistic investigations by Svenska Yle titled “Under the Radar: Export Scam to Russia”.

Equipment was delivered to branches of the official Caterpillar dealer Zeppelin International in St. Petersburg and Moscow. The Swiss company Zeppelin International also has stores in several other cities in Russia, including Krasnodar and Belgorod.

Second notable episode, on August 23, 2023, the company COMMUNNAL SERVICE LLC, registered in Armenia, purchased Caterpillar bulldozers, model CAT D8GC-18A, M8D00384 from Zeppelin International for its own use.

COMMUNNAL SERVICE LLC
COMMUNNAL SERVICE LLC

However, the aforementioned bulldozer ended up in the possession of the Russian company OOO “Tyazhtranslogistic” a couple of weeks after its sale to the Armenian company. The company OOO “Tyazhtranslogistic” is headed by Vadim Valeryevich Gaponenko and has direct ties to numerous other companies.

Tyazhtranslogistic
Tyazhtranslogistic

The equipment could be used for trench and road construction

Russia has built thousands of kilometers of trenches, ditches, and tank barriers in the occupied territories of Ukraine and along its own border with Ukraine.

Pekka Toveri, who spent 40 years in the Defense Forces, including as the head of intelligence at the General Staff, believes it is highly likely that the Russian military also uses civilian excavators for building defensive lines.

“They don’t necessarily have to be armored. A civilian excavator is sufficient for digging trenches and pits, improving the road network, and repairing bridges and other objects destroyed by Ukraine,” says Toveri.

The Swedish investigative journalism team Yle Spotlight collaborated with a Russian freelance journalist who monitors Russian Telegram channels where videos and photos from the Russian-Ukrainian border are posted.

Journalists from Spotlight saw videos on Telegram channels showing civilian excavators being used to construct defensive lines.

EU allowed export of tracked excavators

The fifth package of sanctions introduced by the EU in April 2022 banned the export of construction equipment to Russia. How then did Finnish customs allow excavators to cross the eastern border?

“There are different types of tracks. Sanctions apply to some machines but not to others,” explains Sami Rakshit, head of the customs control department.

It turns out that the export ban from the EU initially applied only to wheeled machines. Tracked equipment was permitted for free export to Russia.

Export of tracked equipment was only banned in the tenth package of EU sanctions in February 2023, a year after the Russian invasion.

Caterpillar continued exports through dealers

 After Russia began its full-scale invasion of Ukraine, American company Caterpillar took a firm stance against the war and closed its plants in Russia. Nevertheless, Caterpillar continued to export excavators and bulldozers to Russia through its dealers in various countries.

Caterpillar dealer company Zeppelin International declined an interview and only responded to questions via email.

Is the company aware of whether its equipment was used for trench construction near the Ukrainian border?

“Zeppelin’s exports to Russia have always been carried out in compliance with all export control laws and sanctions. This means that Zeppelin has completely ceased deliveries to strategic sectors of the Russian industry, such as security and defense, military organizations, and the oil and gas industry,” the company responded.

None of the Caterpillar executives agreed to be interviewed.

“Caterpillar is committed to operating in accordance with the values ​​set forth in its Code of Conduct. This means conducting business in accordance with laws and standards,” Caterpillar said in a brief email response.

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