The policy of import substitution in the defense industry, it seems, has failed: the Prosecutor General’s office and the FAS check scams some Russian companies purchasing foreign equipment and perekleivanie labels, introducing the instrument national reports “Kommersant”.

According to several sources in the defense industry, between checks of the state office of public Prosecutor and FAS there is no direct connection, but both are aimed at establishing the effectiveness of measures on import substitution. The results will be submitted to the government and the presidential administration.

The problem, for example, arose with the instrument electronics. The head of FAS Maxim Ovchinnikov, in a letter to the Ministry in August, wrote: “the cases when the registered in the territory of the Russian Federation entities acquire the goods imported and not producing them any significant technological operations are actually limited to disassembly-Assembly, replacement of labels or Russification, implement them in the framework of the state defense order (SDO) under the guise of goods produced in the Russian Federation”.

The head of Department for supervision over execution of laws in the defense sector of the state office of public Prosecutor Dmitry Demesin sent in the October letter to the Association of suppliers of electronic components: “the General Prosecutor’s office carried out checks of execution of Federal legislation in the field of import of foreign products used in the creation, production and repair of weapons, military and special equipment, as well as compliance in the use of budget funds allocated for the development of innovative projects.”

Defense Ministry spokesman Lieutenant Colonel Vladimir Deryabin says that at all stages of the production of weapons, military and special equipment control, “therefore, the penetration of counterfeit components in products manufactured for the Ministry of defense, are excluded”. Leonid Khozin of the joint instrument Corporation (part of rostec) noted that “in the sphere of the state defense order there are strict requirements that make the supply of foreign equipment under the Russian almost impossible.”

However, the people working with the electronics market, say the opposite. For example, the CEO of the manufacturer of telecollaborative “Elteks” Alexey Chernikov told about the scheme: “Perekleivanie labels really practiced in large numbers, most often used scheme is OEM. It allows Chinese vendors to continue to supply its equipment to Russia in large numbers, despite the policy of import substitution and Russian companies not to spend money on the development and creation of this production, because from the point of view of the profitability of producing in China is still significantly cheaper.”

OEM (original equipment manufacturer) used worldwide. In this scheme, companies buy the equipment from foreign vendors after the upgrade and sell it under its brand. This allows companies to combine efforts to produce the final product. However, in Russia the stage of modernization often miss.

“The problem is the lack of normative base that would allow you to determine exactly what equipment is domestic: the existing criteria can easily be circumvented,” the experts say “Kommersant”.

Genprokurora and the FAS will handle the “import substitution” defence companies: the foreign instrument resealable labels 21.10.2016

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