17 April 2023

Out of Stock? Assessing the Impact of Sanctions on Russia’s Defense Industry

Max Bergmann , Maria Snegovaya , Tina Dolbaia , Nick Fenton , and Samuel Bendett 

This report examines the overall impact of Western sanctions and allied export regulations on Russia’s defense sector to date, as well as the Kremlin’s ability to overcome them. It analyzes Russia’s supply and production of the core weapons and systems that make up its war machine, including tanks, missiles, uncrewed aerial vehicles, aircraft, and electronic warfare systems. It also looks at the key foreign components, restricted by the allied export control measures, needed to produce high-end Russian defense technology, such as optical systems, bearings, machine tools, engines, and microchips. The report then examines the Kremlin’s efforts to mitigate the ramifications of the international sanctions regime through methods such as import substitution and sanctions-evasion techniques.

The report finds that sanctions create shortages of higher-end foreign components and force Moscow to substitute them with lower-quality alternatives. For now, Moscow’s efforts at state-backed import substitution remain largely unsuccessful. This ultimately impacts Russia’s ability to manufacture, sustain, and deliver advanced weapons and technology to the battlefield in Ukraine. Therefore, while the quality of the military equipment used by the Ukrainian army continues to improve thanks to the Western aid, the quality of Russia’s weapons continues to degrade. At the same time, the Kremlin still possesses a significant degree of adaptability to Western sanctions, taking advantage of its prewar stockpiles of older equipment, as well as countries willing to supply Moscow with restricted dual-use items and technology via a web of illicit supply chains. Considering Russia's existing capabilities and limitations, it will likely opt for a slower-paced attritional campaign in Ukraine, putting pressure on Kyiv and its Western partners, but thereby further stressing its military and industrial base already stretched thin by sanctions and the last 12 months of the invasion.

This publication was funded by the Russia Strategic Initiative, U.S. European Command. The views expressed in this publication do not necessarily represent the views of the Department of Defense or the United States Government.

No comments: