Belarusian gambit. How Belshina continued to supply the Russian military

The material was prepared with the support of CyberPartisans and Rabochy Ruch.

In 2024, the European General Court ruled to lift sanctions against OAO Belshina. It stated that allegations the company financed the Lukashenko regime and was linked to supporting Russia's war against Ukraine were unproven. BIC’s own investigation shows that this decision is a mistake.

Fighting corruption: The Lukashenko method

In February 2023, at a meeting with the leadership of the Council of Ministers, Lukashenko announced that Belshina CEO Andrei Bunakou was in pre-trial detention. According to Lukashenko, the investigation against Bunakou is linked to a contract signed with Russian partners to sell giant tires at a price some 16-20% below cost. Lukashenko called Russian intermediaries swindlers who resold tires at almost 60% more than cost.

Belshina produces over 300 types of tires for various vehicles, ranging from passenger cars to heavy-duty trucks.«.The cost of tires for giant vehicles used in the mining industry can reach $20,000 or more. It was these tires that were at the center of the investigations Lukashenko spoke of: 

«There is such a demand for them [tires] today (amidst the sanctions and the departure of Western companies from the Russian market)! Mining companies, especially in Russia, pay crazy amounts of money. Shop till you drop. He was making a loss selling these tires.»

BIC found that the Russian intermediary that Lukashenko spoke of is OOO Emporia Tires, registered in April 2021, shortly before the contract with Belshina was signed. [*]

Emporia Tires is engaged in wholesale trade of automotive parts, components and accessories. That distinguishes it from other buyers of Belshina products. Typically, these are either dealer networks or automobile factories. 

In 2021-2022, the media called Emporia Tires the official distributor of Belshina in Russia. The company supplied giant and super giant tires. In 2022-2023, Emporia Tires was the third largest importer of Belshina tires to Russia by value. According to the EAEU customs database, Emporia Tires exported only Belshina products to Russia. The last shipment took place in January 2023. After that, according to the database, the company did not export anything directly from Belarus to Russia. 

As part of their investigation, BIC journalists established that the beneficiary of the Emporia Tire was Dmitry Lukashenko, the middle son of President Lukashenko.

Getting hit by a dump truck

Belshina's new CEO, Aliaksandr Kavalou, noted that demand for super giant tires at the beginning of 2021 was extremely low. The volume of super giant tires purchased by OAO BelAZ from Belshina has decreased annually. BelAZ has expressed dissatisfaction with the quality of those products as early as 2017: «We delivered a batch of dump trucks fitted with Belarusian tires to Vietnam. They broke down within a couple of months,» said BelAZ deputy general director Kanstantsin Ryltsou. 

With BelAZ unable to guarantee production capacity utilization for super giant tires even at 30%, Belshina signed a supply contract with Emporia Tires in 2021. Kavalou reported this in a letter to the chairman of state-owned Belneftekhim, one of Belshina's shareholders. [*]

The companies entered into this agreement before Russia launched a full-scale invasion of Ukraine, which caused a shortage of super giant tires on the Russian market. Lukashenko claimed the Belshina CEO signed a contract for the exclusive supply of tires to the buyer in the Russian Federation when «Western competitors left the Russian market and prices for these products began to rise». Furthermore, Belshina provided tires not only to Emporia Tires but also to its own subsidiary, OOO «Nizhegorodski TD «Belshina». In some cases, the prices for these items were higher for Emporia Tires.

Following the outbreak of war in 2022, BelAZ once again expressed interest in Belshina tires. However, the plant was unable to fulfill the request due to production capacity being occupied by orders for Russian customers through Emporia Tires. [*]

President Lukashenko adjusted negotiations, bashing Emporia Tires as swindlers. «Who in their right mind would enter into such an agreement in the first place? Which one? Just one look at the contract and straight to prison,» Lukashenko said at a Council of Ministers meeting in February 2023.

As a result, Emporia Tires was banned from selling Belarusian tires to Russia, and the dealer rights were transferred to AO «Trading House BelAZ». [*] 

Since July 2023, Belshina and BelAZ were in negotiations. That same year, the companies signed an agreement for the exclusive sale of Belshina giant and super giant tires to ultimate purchasers in Russia. At the same time, Trading House BelAZ bought super giant tires for the Russian market from Belshina at a lower price than it offered to its own trading house in Nizhny Novgorod, Russia.

The Presidential Sports Club (PSC) owns 45% of Trading House BelAz. PSC is headed by President Lukashenko's middle son Dmitry. As a result of the President’s intervention in Belshina activities, the market was redistributed, and control over the company’s sales passed to a structure controlled by Dmitry Lukashenko. In one of our previous investigations, the BIC uncovered a similar scheme involving PSC and BelAZ: not the most profitable for the producer, but profitable for the members of the ruling family and their associates.

All this calls into question the European Court's decision that Lukashenko's regime does not benefit from Belshina's activities.

Tires for the war machine

The second part of the court's decision, concerning support for the war in Ukraine, was also wrong, the BIC investigation shows.

Belshina's customers include the Russian Ministry of Defense. Belshina supplied tires for Russian military equipment through its distributor, OOO Belnefteсhim-Ros, whose final beneficiary is the Belarusian state. [*] [*] [*]

BIC found that in 2022 and 2023, Belnefteсhim-Ros and the Russian Ministry of Defense signed several contracts worth more than 1.5 billion Russian roubles ($19.5 million). In the first half of 2023 alone, Belnefteсhim-Ros sold more than $11 million worth of goods to the Ministry of Defense. 

In addition, the dealer purchased more than 2 million tires from Belshina for $90 million in 2023. Belnefteсhim-Ros' revenue in 2023 was almost 29 billion Russian rubles (over $321 million), and its net profit was 284 million Russian rubles (almost $3.2 million). [*] [*]

«For OAO Belshina, the tire market of the Russian Federation is of the utmost importance as an export platform. We closely follow and carefully analyze the changes taking place there,» said the company's CEO Aliaksandr Kavalou in January 2024. In August 2022, then-Deputy Prime Minister Piotr Parkhomchyk admitted that Belshina could take the place of the manufacturers that left Russia. 

According to BIC's analysis of customs invoice data, Belshina's deliveries to Russia in 2023 remained at the 2022 level, with 2.8 million tires supplied in 2022 and 2.4 million in 2023. In 2023, Belshina gained new customers including OOO SHERP and AO Automobile Plant «NAZ» (formerly Avtomobile plant GAZ). Deliveries to JSC Avtomobile plant «Ural» have also increased. OOO Nizhegorodski TD «Belshina» sold tires to JSC «BAF», PAO KAMAZ, JSC «Sarapul Electric Generators»  and AO SKB, which is currently under EU sanctions. All the companies listed produce military equipment, which indicates that Belshina's products may be widely used in the Russian military industry.

We found indirect confirmation of the use of Belshina tires on Russian military equipment at the Army 2023 military-technical forum held in the Moscow region. There was military equipment equipped with Belshina tires.

These include the Malva self-propelled howitzer – one of the Russian army's most advanced developments. They are being used in attacks on the Kharkiv Region. Russian war correspondents praise it for its mobility: «Thanks to its wheeled chassis, [it] is able to quickly move into and out of a position, avoiding return fire, which is very important in counter-battery combat.» These chassis – at least at the exhibition – are equipped with Belshina products. 

Another weapon presented at the Army-2023 forum fitted with Belshina tires was the BAZ tractor, adapted for carrying the Russian S-400 air defense system. 

This anti-aircraft missile system has shot down Ukrainian planes, missiles and drones. According to Ukrainian experts, it may have been used to shell Ukrainian border towns. Belarusian tires are also used on various modifications of the Ural Automobile Plant's military chassis that were presented at the 2023 forum. One example is the VPK-Ural armored vehicle. According to a TASS source, it is actively involved in military operations. Ukraine captured one of its modifications during the Russian retreat from the Kherson region. 

«The S-400 is a combat-zone standard. Approximately 20 VPK 590951s, also known as VPK-Ural, were destroyed during the war, with at least three captured, Oleksandr Kovalenko, a military-political expert from the Information Resistance group, told the BIC.

Untimely sanctions

Belshina was on the EU blacklist until spring 2024. This was due to Belarus' support of Russia's military actions against Ukraine. But as early as 2021, the European Union imposed sanctions on the company, citing its status as a leading state-owned enterprise which provides a substantial source of revenue for the Lukashenko regime. Another EU concern was the dismissal of Belshina employees who participated in 2020 post-election protests. This led to accusations of repression against civil society.

Belshina contested the blacklisting and filed a lawsuit in the EU Court. The company asserted that it was a fully state-owned entity, but that at the time it was added to the sanctions list, it was experiencing financial losses. Belshina representatives argued that any restrictions based on supposed financing of the Lukashenko regime were false.

On March 20, 2024, the European General Court ruled to lift sanctions against Belshina. The court found that the Council of the European Union had not demonstrated that Belshina was a substantial source of revenue for Lukashenko's regime, nor that the “Belarusian government derived direct benefit from the income received [by the company]”. The court also removed Belshina from the list of EU sanctions imposed in response to the situation in Ukraine. 

But as our research has shown, at least in 2022-2023, the company supplied tires for Russian military equipment and cooperated with the Russian Ministry of Defense. In 2023, the company's distributor became Trading House BelAZ, 45% owned by the Presidential Sports Club led by Dmitry Lukashenko.

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