Caterpillar and Zeppelin Helped Russia in Circumventing Sanctions

Companies Caterpillar and Zeppelin International evaded sanctions and continued profiting from the war, selling construction equipment to Russia. Russian customs statistics reveal that new excavators, bulldozers, and bucket loaders were imported, notably through the ports of Kotka, Helsinki, and Hanko, as well as via private companies in Armenia.

Between February 2022 and February 2023, a total of 270 new machines were exported to Russia through Finnish ports, with equipment delivered to branches of the official Caterpillar dealer Zeppelin International in St. Petersburg and Moscow. Zeppelin International, a Swiss company, also operates stores in several other Russian cities, including Krasnodar and Belgorod.

In a significant incident, on August 23, 2023, COMMUNAL SERVICE LLC, registered in Armenia, purchased a Caterpillar bulldozer, model CAT D8GC-18A, M8D00384 from Zeppelin International for its use. However, the bulldozer ended up in the possession of the Russian Tyazhtranslogistic LLC a couple of weeks after its sale to the Armenian company. Tyazhtranslogistic LLC, headed by Vadim Valeryevich Gaponenko, has direct ties to numerous other companies.

The equipment could potentially be used for trench and road construction. Russia has constructed thousands of kilometers of trenches, ditches, and tank barriers in the occupied territories of Ukraine and along its border with Ukraine.

Pekka Toveri, a former Defense Forces member with 40 years of experience, including as the head of intelligence at the General Staff, believes it is highly likely that the Russian military also uses civilian excavators for building defensive lines. According to Toveri, “They don’t necessarily have to be armored. A civilian excavator is sufficient for digging trenches and pits, improving the road network, and repairing destroyed bridges and other objects.”

The Swedish investigative journalism team Yle Spotlight collaborated with a Russian freelance journalist who monitors Russian Telegram channels where videos and photos from the Russian-Ukrainian border are posted. Journalists from Spotlight saw videos on Telegram channels showing civilian excavators being used to construct defensive lines.

The EU’s fifth package of sanctions introduced in April 2022 banned the export of construction equipment to Russia. Sami Rakshit, head of the customs control department, stated the following: “There are different types of tracks. Sanctions apply to some machines but not to others.” Initially, the export ban from the EU applied only to wheeled machines, while tracked equipment was permitted for free export to Russia. The export of tracked equipment was only banned in the tenth package of EU sanctions in February 2023, a year after the Russian invasion.

Following Russia’s full-scale invasion of Ukraine, US company Caterpillar took a firm stance against the war and closed its plants in Russia. However, Caterpillar continued to export excavators and bulldozers to Russia through its dealers in various countries. Caterpillar dealer company Zeppelin International declined an interview and only responded to questions via email.

In response to inquiries, Zeppelin International stated the following: “Zeppelin’s exports to Russia have always been carried out in compliance with all export control laws and sanctions. This means that Zeppelin has completely ceased deliveries to strategic sectors of the Russian industry, such as security and defense, military organizations, and the oil and gas industry.” However, none of the Caterpillar executives agreed to be interviewed.

The Western countries should take appropriate measures to prevent Caterpillar and Zeppelin from profiting from the trade with Russia. Moreover, these companies should stop supplying the Russian Federation with the specific equipment used to strengthen the Russian Armed Forces, killing innocent Ukrainian civilians, including children.

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