Austria dismantles sanctions-evasion scheme supplying Russian arms industry

The move targets networks that exploited intermediary companies in countries like Spain and Hong Kong to circumvent EU sanctions imposed in 2022, keeping critical machinery flowing to Russian military manufacturers long after the rules were supposed to cut off supply.

The machinery pipeline

At the center of the evasion network sits a type of equipment most people have never heard of but that matters enormously for modern warfare: radial forging machines. These specialized systems shape metal components used in artillery barrels and other weapons, and Austrian manufacturer GFM is one of the world’s leading producers.

GFM’s machines remain in active use at Russian facilities, and the company’s products have been routed to Russian buyers through creative middlemen. One documented transaction involved a used 1983 CNC forging machine, a 110-ton behemoth, that was sold for $1.3 million and shipped from Spain to a Russian firm called AZK Group LLC.

The Hennlich Group, another Austrian company, operated through its Russian subsidiary to ship restricted industrial components directly to military manufacturers. Between 2022 and 2024, that subsidiary completed 583 separate shipments valued at a combined $2.9 million.

Austria’s enforcement gap

Austria has occupied an uncomfortable position in Europe’s sanctions landscape. While countries like Germany and the Netherlands have aggressively pursued sanctions violators, Austria’s enforcement efforts have been described as lagging behind its peers.

EU sanctions on dual-use goods took effect in 2022, shortly after Russia’s full-scale invasion of Ukraine. The restrictions were designed to choke off the flow of components that could serve both civilian and military purposes, everything from semiconductors to precision machining equipment.

Only a handful of companies worldwide produce radial forging machines at the quality levels required for weapons manufacturing. When Austrian-made machines keep showing up in Russian factories, it represents a genuine strategic problem for the West’s sanctions regime, not just a paperwork violation.

The 583 shipments from Hennlich’s Russian subsidiary illustrate a particular vulnerability: companies with pre-existing Russian subsidiaries or joint ventures that continued operating after sanctions took effect.