Ukranian Watchdog Accuses Haas of Breaking Sanctions to Sell Machines to Russian Arms Manufacturers (UPDATED)
American manufacturing technology giant Haas Automation has been accused of violating U.S.-led sanctions on Russia, according to a Ukrainian watchdog report filed with U.S. regulators and reported by PBS Newshour. Haas strongly denies the claims.
Update 3/16/23, at 10:28 a.m. E.T.: This story has been updated with Haas Automation and Haas F1's responses to the allegations.
Road & Track has not independently viewed and verified the documentation referenced by the PBS report (though we have reached out to the watchdog), but the outlet cites evidence that Haas continued sending computer numerical control (CNC) machines to Russia after strict sanctions were announced by Western powers. These highly complex machines are used to produce complicated parts that require precise, robotic, computer-controlled manufacturing processes. Russia's limited ability to produce competitive machines is a key strategic weakness, and a chokepoint that massively limits its ability to produce high-end guided missiles, complex vehicles, airframes, and munitions. Cutting off its ability to import these machines is a key tenet of the Western powers' strategy to cripple the Russian war effort.
The allegation comes from the Economic Security Council of Ukraine. The ESCU is an independent watchdog organization "responsible for identifying and countering internal and external threats to economic security in Ukraine," according to its website. It often publishes information related to companies and countries that are skirting sanctions on Russia.
PBS claims that customs records in its possession show 18 shipments to Russia between March and October of 2022, all directly from Haas Automation. The outlet says the cumulative value of the shipments was $2.8 million.
In a statement to Road & Track, Haas vigorously denied these allegations:
On Tuesday, March 14, PBS ran a story alleging that Haas Automation has directly provided machines and parts to Russia in violation of U.S. export control and sanctions regulations. That story is simply false, both in its overall impression and in many of its particular statements.
The company's statement goes on to claim that it voluntarily terminated its agreement with Russian distributor Abamet, but that Abamet had already taken possession of a number of machines before that relationship was ended.
"Simply put, if any shipments of Haas manufactured machines or components occurred after March 3, 2022, such shipments were made, unbeknownst to Haas, by Abamet or one of Haas’ numerous other customers around the world," the statement says. "Any such shipments would have been made in direct contravention of express Haas policy with regard to Russia following its February 2022 invasion of Ukraine."
Read Haas's full statement below:
If U.S. regulators do find evidence that Haas Automation intentionally skirted these sanctions, they are likely to come down hard on the company. The Departments of Justice, Commerce, and the Treasury announced in a joint release two weeks ago that companies aiding Putin's war effort will be held accountable. Stratospheric fines and criminal penalties are not out of the norm when the U.S. catches sanction evaders.
How this will affect the racing team, Haas F1, remains to be seen. The team was founded by Gene Haas of Haas Automation, but isn't part of the larger Haas Automation business. The automation company is the racing team's machine tool partner, but the team itself is unlikely to have any direct exposure to the alleged crimes in question. It sent a shorter version of the Haas Automation statement to Road & Track and directed us to the longer, official statement that denied the allegations in detail.
Still, the team has had its own problems related to Russia. Its former driver Nikita Mazepin is the son of Dmitry Mazepin, a Russian oligarch who brought on Russian fertilizer firm Uralkali as Haas' title sponsor. The team dropped both Uralkali and Mazepin in March of last year, with a statement that directly criticized the invasion of Ukraine.
TEAM STATEMENT #HaasF1 pic.twitter.com/5aEXLzYtmV
— MoneyGram Haas F1 Team (@HaasF1Team) March 5, 2022
Shortly after, both Nikita and Dimitry Mazepin were sanctioned by the European Union. In the filing announcing the new round of sanctions, the EU said that Dimitry Mazepin's presence at a dinner of Oligarchs showed that "he is a member of the closest circle of Vladimir Putin and that he is supporting or implementing actions or policies which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine."
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