Austria breaks up sanctions-evasion scheme supplying Russian arms industry

VIENNA, Aug 10 (Reuters) - Austria has broken up a scheme in which a Vienna-based company supplied equipment used to make engines for Russian missiles and fighter jets, in breach of European Union sanctions, the interior ministry said on Monday.

The company falsified end-user certificates to supply the equipment under sanctions, including special metalworking tools and CNC machines, which can be used to make parts and tools, the ministry said in a statement. It added that the 28-year-old Belarusian head of the company was arrested in May.

The company, which the ministry did not name, concealed its shipments through a network of shell companies in Turkey, the United Arab Emirates, Hong Kong, Belarus, Kyrgyzstan, South Korea, Poland and Lithuania, the ministry said.

"It is unacceptable for high-precision European technology to be diverted towards the production of cruise missiles and air-defence systems," Austria's junior minister in charge of intelligence, Joerg Leichtfried, said.

"We will continue to take decisive action ... against those actors who attempt to circumvent legal bans on supporting the Russian arms industry."

The equipment was supplied to companies affiliated with Russian state industrial conglomerate Rostec, the ministry said. Investigators' latest findings indicate the goods were used to make military equipment, including engines for cruise missiles and fighter jets.

The Russian embassy in Vienna declined to comment. Rostec did not immediately respond to a request for comment.

On the same day the chief suspect was arrested, authorities seized CNC machines and specialised tools worth about €140,000 ($162,000), the ministry said. The suspect, who was not named, remains in custody while the investigation continues.

Evidence seized during four raids in August last year indicated that industrial goods worth more than €3.3 million had been delivered to Russian arms manufacturers since 2022, the ministry added.

($1 = 0.8659 euros)

(Reporting by Francois Murphy. Editing by Mark Potter)