South Korea has been supplying machine tools to the Russian arms industry all along

Hanwha Group is the seventh largest industrial conglomerate in South Korea. Hanwha Defense, a part of it, is one of the largest military contractors in South Korea. After Russia's annexation of Crimea in 2014, the company entered the European arms market. As the Financial Times wrote last year, the company supplies, among other things, self-propelled howitzers to NATO countries. Hanwha also has significant interests in the United States, according to The Insider.

Thanks to deliveries to Poland, Norway, and Estonia, Hanwha Aerospace doubled its production of 155mm howitzers in 2022 and plans to double it again this year, according to the Wall Street Journal, quoting Choi Dong-bin, general manager of the Hanwha Aerospace plant.

South Korea does not officially supply Ukraine with weapons, limiting itself to economic and humanitarian aid. At the same time, Poland handed over 50 Korean-made Crab howitzers to Ukraine, presumably with the consent of the Korean side.

Hanwha also successfully cooperates with Russia. After the outbreak of the war, from March 1, 2022, to February 28, 2023, according to the Import Genius system, imports of Hanwha-branded products to Russia amounted to $22.3 million. Of this amount, $9.5 million was accounted for by Hanwha Precision Machinery, which manufactures high-precision metalworking equipment.

On April 24, 2023, South Korea expanded restrictions on the export of goods to Russia, but the export of machine tools continued. According to the NBD system, from March 1, 2022, to July 31, 2023, Hanwha Precision Machinery's exports to Russia reached $13.7 million.

Therefore, the Russian importer of Hanwha equipment, Finval, continued to buy Korean machines. At the same time, a significant part of the company's business is government orders.

Now, after the imposition of US sanctions, Hanwha Precision Machinery will obviously not do business with a Russian buyer on the US sanctions list. At the same time, the company risked being subject to secondary sanctions, as a significant part of its supplies was intended for Russian companies that are under sanctions.

Background. The day before, it became known that the United States had expanded sanctions against Russia, adding more than 30 individuals and nearly 200 companies to the list.