International sponsors of war: new details of DMG Mori's activities in the Russian market

29.09.2023

On September 20, 2023, the National Agency for the Prevention of Corruption (NAPC) added two leading German CNC machine tools manufacturers, SPINNER and DMG MORI, to the list of international sponsors of war. As stated by the NACP, the German-Japanese manufacturer of high-precision machine tools DMG MORI still runs in its operations on the Russian market. New details of DMG Mori's presence in the market of the aggressor state and the supply of equipment to Russian military enterprises have been made public. According to the German newspaper Die Zeit and a classified report by the Economic Security Council of Ukraine, the Russian subsidiary DMG Mori Rus has been making millions in sales since the start of the full-scale war. In the second half of 2022 alone, the Russian branch sold goods and services worth $16 million, and in the first 3 months of 2023, it made another $2 million in profit. The main clients of DMG Mori Rus were companies established by former employees of the branch itself:

DM Technologies, which was registered in April 2022 under the leadership of a longtime DMG Mori Rus employee.
Service Plus LLC is associated with the wife of the head of DMG Mori Rus. The company cooperates with the military-industrial complex of the Russian Federation.
Service Pro LLC is a branch of Service Plus LLC, which was opened in the summer of 2022 at the same address as the DMG Mori plant in Ulyanovsk. The company also serves military customers.

The analysts also managed to identify that products from the Ulyanovsk plant (which still belongs to DMG Mori and, according to the company's management, has not been operational since February 2022) are still being supplied to Russian military-industrial enterprises. In July 2022, two DMG Mori computer numerical control machines and machine components were received by Promtech-Dubna JSC, which is under US and EU sanctions because of contracts with military enterprises such as Raduga (which produces tactical missiles), MIG and Sukhoi (which produce fighter jets), and others. The NACP is updating the profile of DMG Mori in the list of war sponsors in light of new data and calls upon the German-Japanese manufacturer to completely and transparently withdraw from the Russian market. The ability of the aggressor country to manufacture weapons is critically dependent on the import of foreign computer numerical control machines and components. The NACP is actively investigating this sector and will report on all further decisions in this area. The NACP is the body responsible for the compliance system in the private sector. During compliance procedures, counterparties are subject to integrity checks, including socially responsible business conduct in accordance with OECD standards. The list of “International War Sponsors” on the “War and Sanctions” portal is a powerful reputational tool for achieving the integrity of supply chains in the international dimension, the exit of international business from Russia, thus reducing the financial and technological ability of the terrorist country to kill Ukrainians. One of the “leverages” of the platform is cooperation with the World-Check database, which is used by banks and insurance companies for risk assessment. That is why for global companies, the consequences of being on the list become worse than continuing to do business with the aggressor country.