Reuters: The supply chain that keeps tech flowing to Russia – Analysis

Turkey’s instrumental role on keeping supply channels open for Russia

In March 2022 a new firm appeared in Turkey’s corporate registry called Azu International Ltd Sti. It described itself as a wholesale trader of IT products and about one week later began shipping US computer parts to Russia.

Business was brisk, Russian customs records show. The United States and the EU had recently restricted sales of sensitive technology to Russia because of its Feb. 24 invasion of Ukraine, and many Western tech companies had suspended all dealings with Moscow.

Co-founded by Gokturk Agvaz, a Turkish businessman, Azu International stepped in to help fill the supply gap. Over the next seven months, the company exported at least $20 million worth of components to Russia, including chips made by U.S. manufacturers, according to Russian customs records.

Azu International’s rapidly growing business didn’t come from a standing start, Reuters reporting shows: Agvaz manages a wholesaler of IT products in Germany called Smart Impex GmbH. Before the invasion, Russian custom records show that the German company shipped American and other products to a Moscow customer that recently has imported goods from Azu International.

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Reached at his office near Cologne in October, Agvaz told Reuters that Smart Impex stopped exporting to Russia to comply with EU trade restrictions but sells to Turkey, a non-EU country that doesn’t enforce most of the West’s sanctions against Moscow. “We cannot export to Russia, we cannot sell to Russia, and that’s why we just sell to Turkey,” he said. Asked about Azu International’s sales to Russia, he replied, “This is a business secret of ours.”

Contacted again shortly before publication, Agvaz said Smart Impex “observes all export restrictions and manufacturer bans” and “has not circumvented Western sanctions against Russia.” He said he couldn’t answer questions about Azu International. Turkish corporate records show he sold his 50% interest in the Istanbul company on Nov. 30 to his co-founder, Huma Gulum Ulucan. She couldn’t be reached for comment.

Read more: Reuters