Over $8 million worth of Dutch technology in secret Russian defense project: report

Products from three Dutch companies are used in a weapon at sea that Russia is secretly building to protect its nuclear submarines. Maritime technology company Royal IHC, Rederij Groen, and Smit Terminals (now Boskalis) together supplied over $8 million in products to a company in Cyprus that is a Russian front, Pointer discovered “Russian Secrets,” an international investigative project by journalists from the Dutch program, NDR, Le Monde, and The Washington Post, among others.

For over a decade, the Russian Ministry of Defense has used a network of shell companies to acquire technology from the West, purchasing goods from nine European countries, the United States, Canada, and Japan, the journalists discovered.

Central to this Russian procurement network is the Cyprus-based Mostrello Commercial Limited. The company is owned by a Moscow businessman who has worked for the Russian military and intelligence services on several occasions. Pointer’s investigation showed that Mostrello and sister companies purchased over $56 million worth of sensitive underwater technology and research vessels over the past 12 years.

These goods ultimately ended up at the Russian state-owned company Upravelenie Perspektivnyh Tecknologij (UPT), with which Russia is building an underwater defense system to protect its nuclear submarines. This defense system is known as project Harmony, and it increases Russia’s military capabilities in the Arctic, where its nuclear submarines are stationed.

Leaked information revealed that Mostrello purchased equipment from at least three Dutch companies. The Russian shell company bought $4.2 million worth of maritime equipment from Royal IHC, which has received Dutch government funding on several occasions because it manufactures submarines for defense. Mostrello also bought the research vessels Mariska G from the Dutch shipping company Rederij Groen and the Sam O’Cat from the Dutch company Smit Terminals Europe LTD, which has now been acquired by Boskalis.

Spokespersons for Rederij Groen and Smit Terminals confirmed the sale of the research vessels. All three companies state that they complied with all legal requirements.

But according to sanctions experts, these three Dutch companies should have recognized that they were selling goods to Russia. “A letterbox company in Cyprus is a classic red flag,” Frank Slijper, a defense expert at PAX, told Pointer. “Companies active in the offshore and defense sectors, in particular, know how sensitive these exports are.”