While Putin's regime is under scrutiny by the EU and the USA for human rights violation, corruption and abuse of power of International proportions a French company supplies sensitive microchips to his cronies via a complicated set of deals.

Even the most pro-Putin forces in the West have long been disenchanted with his shenanigans to put it mildly, which during the several past years included but were not limited to illegal wars and annexation of a neighboring country's territory, meddling in the affairs of sovereign states, poisoning political opponents both in Russia and on the foreign soil, violation of human rights and openly supporting types like Alexander Lukashenko and Nicolas Maduro. In the meantime Mr. Putin, who has been in power since 1999, accumulated huge wealth and even got a 1 billion dollar palace in the South of Russia, built for him by his posse, who have been making billions on government contracts ever since Vladimir became a czar-wannabe.

Luckily the Russo-Ukrainian War of 2014 urged the EU and the USA to finally take a stand against Putin's regime by introducing a number of sanctions, particularly in the spheres of high technologies, banning export of military and dual-use technologies to Russia altogether and requiring additional control and caution before exporting technologies intended for civil use. Unfortunately yet some European companies preferred to continue their business as usual and ignore the basic trade compliance rules with regards to their partners in Russia, one of them being Thales Group, 26.4%  of which interestingly belongs to the Government of France.

Its subsidiary Thales Digital Identity and Security (former Gemalto) has been supplying high tech microchips since 2017 to the Russian company with a complicated name Intelligent Telematics Systems for Transport (further on - ITST). Although supplied microchips are not military or dual use grade, they still represent a fairly sophisticated piece of microelectronic technology that is why the shady nature of the deal is of particular concern.

First of all, the chips have been supplied indirectly to ITST, but via the company named Atlascart, which has been closely associated with the FSB (Federal Security Bureau, ex-KGB). The company has been making billions as a monopolist in cryptographic modules for Russian-made cash registers and tachographs and operated mostly out of the scope of publicity, but gained notoriety in 2017, when one of its key beneficiaries Vladimir Scherbakov had to flee Russia to escape prosecution and died several days later in London under mysterious circumstances. As often happens with powerful Russians who fall from Putin's FSB grace in London his death was ruled a suicide. Interestingly immediately after the alleged suicide of Mr. Scherbakov Atlascart has been acquired by Rostec, a huge state-owned industrial conglomerate famous for its military business and managed by Sergey Chemezov, one of the closest allies of Vladimir Putin and his ex-collegue in Soviet KGB. In 2019 Chemezov's family officially declared income of staggering 2 billion roubles (more than 27 million USD). For a country with an average salary of roughly 5000 USD per year that's an outrage. Well, let's leave Mr. Chemezov's incomes on him, but the far more disturbing fact is that heavy US and EU sanctions have been imposed on Rostec due to its involvement in military equipment manufacturing and sales as well as construction of power stations in annexed Crimea.

So after Thales sold microchips to Atlascart, which as mentioned above was a very dubious partner to begin with, the chips were resold apparently with Thales' consent to ITST, a company which is not less, but even more fishy than Atlascart. The CEO of the company is someone named Yury Moskvichev, who was appointed to this position in July, 2020. Within a month from this appointment ITST was granted approval of the Russian Ministry of Transport to supply personalized identity cards with Thales chips, which allowed ITST to gain 50% market share almost immediately. How comes ITST received such a great support from Russian government?

The answer is typical for Putin's Russia. The CEO of ITST Yury Moskvichev is the son of Evgeny Moskvichev, member of the Russian Parliament and Chairman of the Parliament's Committee for Transport! Mr. Moskvichev is naturally a member of pro-Putin party United Russia and a former Deputy Minister of Transport of Russia. During his days in the Ministry of Transport he worked directly under Minister Igor Levitin, who is another close confidante of Vladimir Putin and has been working as a Presidential Aide ever since 2013. Evgeny Moskvichev gained some notoriety for plagiarizing his PhD dissertation and openly praising the annexation of Crimea.

Yet there are far more complicated questions begging for answers here. Does a big name European company like Thales have any knowledge of basic trade compliance rules at all? And if yes, how it still went forward with the deal and supplied sensitive microelectronic components to companies like Atlascart and ITST? 

I guess these questions will find answers soon, though I hope it's not me, who will be doing the research, but the proper European authorities. Public condemnation is all good, but ceasing to do any business with Putin's buddies is absolutely crucial. Not only it will deplete his clique of cleptocrats of financial resources, in case with high technology business it will reassure us that our knowhow and expertise are in good hands.