Irish firm accused of helping bring microchips into Russia to be used in military hardware

An Irish technology company has been accused of forming a key part of an international smuggling network bringing microchips into Russia to be used in military hardware.

To date, investigations into the network have resulted in the shuttering of a major French electronics company, the arrest of its senior staff and the sanctioning of various individuals and companies by the US and UK governments.

According to customs documents and French prosecution documents, Amideon Systems Ltd, which was founded by two brothers from Galway, along with its subsidiaries, played a key role in bringing the chips into Russia at a time when it was subject to strict sanctions following Vladimir Putin’s invasion of Crimea in 2014.

Amideon was allegedly a key middleman in transferring the sensitive technology from the French manufacturer Ommic to a Russian company acting on behalf of the Russian state defence industry.

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Details of the network were first reported in a wide-ranging investigation by the Financial Times.

Amideon Systems Ltd was founded in 2001 by Eoin and Denis Sugrue, whose links with the Russian electronics industry date back to 1989. Over the years, Amideon Systems, which was based in Limerick, set up various subsidiaries, including one based in the United Arab Emirates.

Fly Bridge was founded by Maksim Ermakov, who has recently been placed under sanctions by the US and UK governments

Customs documents reviewed by The Irish Times, show Amideon’s relationship with Ommic dates back to at least 2013, when it began acting as a conduit for the transfer of its microchips and related technology.

The components were mostly shipped through Amideon’s UAE-based subsidiary Amideon FZC to Fly Bridge, a Moscow-based company. Fly Bridge acquired the technology on behalf of Istok, a Russian state-owned company that makes electronic warfare systems for the Russian military.

Fly Bridge was founded by Maksim Ermakov, who has recently been placed under sanctions by the US and UK governments.

The relationship between the companies continued following Russia’s invasion of Crimea in 2014 and the stepping up of western sanctions in response, which included a ban on the sale of sensitive components that could have military applications.

The French authorities believe the export of the microchips through a circuitous international network was aimed at circumventing controls designed to prevent military technology falling into the hands of France’s adversaries.

Customs documents show shipments through Amideon ceased in 2018. However, according to the Financial Times, Marc Rocchi, the director general of Ommic, told prosecutors that Amideon remained involved until 2021, shortly before Russia launched its full-scale invasion of Ukraine.

Earlier this year, French counter-espionage officers arrested nine people linked to Ommic, including Mr Rocchi, who now faces charges of sending secrets to a foreign power, exporting restricted dual-use goods to Russia and submitting falsified custom documents.

He is accused of labelling the chips as being less powerful that they were, thereby avoiding export controls.

Using national security legislation, French officials have also overseen the sale of Ommic assets to an American electronics manufacturer.

[ How PwC scrambled to keep powerful Russian clients ahead of war sanctions ]

Last week, the UK government announced sanctions targeting Fly Bridge and members of Istok’s board, along with Mr Ermakov. The sanctions were an attempt “to disrupt a covert procurement network used by Russia to acquire critical western technology,” the UK Foreign Office said.

The US Treasury Department announced similar sanctions aimed at “diminishing Russia’s domestic industrial base”.

To date, neither Ireland nor the EU have announced sanctions against the companies. Amideon and its subsidiaries have not been sanctioned in any jurisdiction and are not accused of any criminal wrongdoing.

Amideon Systems was dissolved in August. Eoin Sugrue was listed as one of its directors at the time. However, Mr Sugrue died the previous year in Nice, France aged 66.

Denis Sugrue, who now lives in Moscow, stepped down as a director in 2005. That same year, he was arrested by the FBI in California and accused of unlawfully exporting military components to Russia via Limerick. He was held in custody for 15 weeks before US prosecutors dropped their case, events which were later detailed by Mr Sugrue in a self-published memoir, The Russians are Coming.

Denis Sugrue and other family members of Eoin Sugrue did not respond to requests for comment. Messages sent to an email address for Amideon were not answered.

In response to queries on the case, the Department of Enterprise and Trade said Ireland has a robust export control licensing and compliance system in place and that “all applications for export authorisations are subject to rigorous scrutiny”.

A spokesman added that investigations are carried out “if there are grounds for suspecting that the goods may in whole or in part be diverted or misused”. He said if items leave the EU from another member state, then that state must be consulted.