UK Government Reconsiders Export Approval for Armenian Firm Amid Russian Military Concerns
Ministers have initiated a review of a decision permitting a British company to export advanced machinery to Armenia, following revelations of connections to Russia's military supply chain. This move comes as part of broader efforts to enforce sanctions against Vladimir Putin's regime in response to the full-scale invasion of Ukraine.
Background on the Export Deal
Cygnet Texkimp, a Cheshire-based firm, was on the verge of shipping two machines that produce carbon fibre "prepreg," a lightweight material with applications in both civilian and military sectors, including missile and drone production. Initially, Whitehall officials informed Cygnet that no special licence was required, indicating no red flags during routine vetting.
However, trade minister Chris Bryant has now placed the deal on hold, citing concerns that the equipment could be diverted for military use. This action follows a report by the Guardian highlighting links between Cygnet's Armenian client, Rydena LLC, and the Russian military.
Links to Russian Military Supply Chain
Rydena was established two years into the Ukraine invasion by former executives of Umatex, a Kremlin-owned company integral to Putin's war machine. Experts warn that this history raises significant questions about whether Cygnet's hardware could facilitate carbon fibre supplies to Russia, potentially circumventing international sanctions.
Both Rydena and Cygnet have asserted that the equipment is intended for civil applications, with Rydena denying any business ties to Russia or sanctioned entities. Despite these claims, the government is taking precautionary measures.
Government Response and Regulatory Actions
In a letter to Liam Byrne, chair of the House of Commons business committee, Bryant confirmed that the government is re-evaluating its earlier determination that no licence was needed. He stated, "We are currently reviewing an earlier determination that the export was not subject to licence as the goods were not considered to be controlled."
Bryant explained that after consulting with Cygnet Texkimp, some elements of the production equipment are now considered subject to dual-use controls, which regulate items with both civil and military applications to prevent misuse in conflicts. The Department for Business and Trade has reopened the licence application, ensuring no export will proceed without proper assessment.
Broader Implications and Future Measures
Bryant emphasised Cygnet Texkimp's long-standing compliance with export regulations and its positive relationship with the Export Control Joint Unit (ECJU), which coordinates government and intelligence efforts to flag risky deals. He also indicated plans to strengthen export licensing laws to better control goods that might be diverted to Russia.
A spokesperson for Cygnet Texkimp reiterated the company's commitment to following UK export rules, noting, "We proactively engaged with the relevant UK authorities and voluntarily submitted an application for an export licence... We will await the outcome of this process."
This case underscores ongoing challenges in enforcing sanctions and highlights the need for vigilant oversight in international trade to prevent unintended support for military activities.
