News

The UK business that shipped $1.2bn of electronics to Russia

A British business registered to a terraced house in a north London suburb appears to have arranged the sale of about $1.2bn of electronics into Russia since Vladimir Putin’s full-scale invasion of Ukraine at the start of 2022.

Mykines Corporation LLP, a company based in the London borough of Enfield, is listed in Russian records as having sent shipments including semiconductors, servers, laptops, computer components, telecoms network equipment and consumer electronics. The records list brands ranging from Huawei and H3C to Intel, AMD, Apple and Samsung.

According to these customs filings, at least $982mn of the goods listed as sent by Mykines are subject to restrictions on export by UK companies or individuals to Russia. Sale of these goods to Russia without permission from the UK authorities may constitute a breach of its sanctions, even though the goods shipped by Mykines entered Russia from other countries — largely China.

These findings raise questions over the effectiveness of the attempts to clamp down on Russia’s ability to obtain critical technologies used by the country’s military industrial complex.

The raw data analysed by the Financial Times was obtained from Maxim Mironov, a professor at IE Business School in Buenos Aires who is an expert on analysis of customs flows. A subset of the records was corroborated by comparison to data from ImportGenius, a commercial customs data provider.

The biggest categories of goods shipped to Russia by Mykines
1 Mobile telephones $568mn The declarations are vague on brands — mostly not given
2 Laptops $229mn
3 Other computers, including some described as servers $113mn
4 Integrated circuitboards $63mn Mostly from Intel, some from AMD
5 Computer components $35mn
6 Telephone network equipment $35mn Largely Huawei and H3C
7 Expansion boards for computers $23mn
8 Transmission equipment $22mn
9 Transformers for use with telecoms equipment $15mn
10 Telephone headsets $15mn
Grouped by customs categories of goods

While many of the Mykines exports are consumer goods, they also include a large volume of high-end microchips, telecoms equipment and servers, which may support Russian infrastructure.

A UK government spokesman said: “All businesses registered in the UK are bound by law to comply with the Russia sanctions regime. We take potential breaches very seriously, but do not discuss the details of how we enforce trade sanctions for specific cases.”

The trade also raises questions about the use of British secrecy jurisdictions. Mykines’ accounts from previous years show that at that time it passed its profits directly to two entities in the British Virgin Islands whose ownership is unknown.

The FT visited the terraced house where Mykines is registered in Southgate, an area of Enfield. It is one of two active companies registered to the address, which is owned by Savvas Themistocleous, the Cyprus-based owner of a fiduciary service. In 2013, he set up a company in which he was the sole director called “Russian Trading Company Ltd”.

Themistocleous told the FT that he would pass on questions to the person listed as having “significant control” over Mykines — Vitalii Poliakov, a 53-year-old Ukrainian, who is described as resident in Ukraine. According to Molfar, a Ukrainian open-source intelligence group, only one person matches the given description of Poliakov — a road worker employed by a Ukrainian state mining concern. He did not respond to requests for comment.

Until last August, the controlling owner of Mykines was listed as a 34-year-old Ukrainian woman born in the same town as Poliakov. According to an online testimonial posted in 2018, she attended a two-week English language course at a small college in London and stayed with a host family. Her public Instagram page lists her activities as an IT professional and pole dancer. She did not respond to requests for comment.

Mykines had been active in Russia prior to the invasion, but the records imply its business with the country suddenly took off after the onset of the war.

The other firm listed at the Enfield address, Denirello LLP, had been active in selling similar goods to Russia before the war, but appears to have wound down and ceased exporting to Russia as tougher sanctions were introduced in 2022. Denirello described itself as “a dynamic diversified company distributing medical, industrial and IT equipment in Russia and CIS [Commonwealth of Independent States]”.

The overwhelming majority of the 10,600 batches of goods are listed as having been sent to Marsala, a Moscow-based company. Russian records show it imports very little except from Mykines. The company appears to be strongly linked to Merlion, a large computing and electronics distributor within Russia. Marsala and Merlion have been approached for comment.

While most of the goods appear to be primarily civilian in nature, Marsala has declared in Russian official listings that one of its counterparties is Microcontract, a company that owns a joint venture with Novgorod State University Engineering Center. This centre, launched in collaboration with Rostec, the vast state-owned military conglomerate, lists its areas of research as including aviation and drones, microelectronics, sensors and industrial electronics.

Some of the customs records have errors — or may have been the subject of subterfuge. For example, there are six entries logging the import of paper. But the implied price of this paper is, in some cases, $500,000 a kilogramme. The purported paper is also listed as having been made by Huawei and New H3C Technologies, Chinese high-end technology companies.

This article has been updated to clarify Mykines’ stated ownership