• 14/07/2024 10:48

Russia overpays 60% due to sanctions against military industry – British intelligence

 Russia is overpaying 60% due to sanctions against the military industry - British intelligence

Sanctions will continue to disrupt both the demand and supply of Russian arms exports, as well as significantly complicate payment mechanisms in Russia, says a British intelligence report.

Sanctionswill continue to undermine key resources for the Russian defense industry. Russia's isolation limits the number of countries with which it can trade directly, increasing the time and cost of acquiring goods it could ever buy freely.

This is according to an April 1 British MoD intelligence review.< /p>

Research by the Institute for Emerging Economies of the Bank of Finland shows that third countries charge a price premium of more than 60% for the export of some sanctioned goods to Russia.

While Russia has increased production of key munitions most commonly used in Ukraine, such as artillery shells, the sanctions are likely to have the greatest impact on Russia's more advanced and sophisticated weapons systems, according to British intelligence. These systems will almost certainly increasingly rely on foreign components and technology for production and development.

“Sanctions will continue to disrupt both the demand and supply of Russian arms exports, as well as significantly complicate payment arrangements to Russia. This has almost certainly contributed to a significant decline in Russian arms exports and increased delivery delays, including to some of the most important remaining arms customers,” – the summary says.

Russia's share of the global arms trade fell to 11% between 2019 and 2023, down from 21% between 2014 and 2018, according to the Stockholm International Peace Research Institute.

It was previously reported that Russian defense factories cannot produce the planned number of drones due to European Union sanctions.

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