Russia-Linked Companies Still Winning Billions in EU Procurement Deals

Russian President Vladimir Putin chairs a meeting with the State Council Presidium on developing Russian industry under sanctions during a trip to Tula, Russia, 04 April 2023. EPA-EFE/GAVRIIL GRIGOROV

Using proprietary software that analyses big data on company ownership structures and links them to public procurement data across more than 100 countries, Datlab found that at least 39,535 companies should not be getting any above-threshold public tenders in the EU. Yet it identified that 242 of these "high-risk" companies have kept winning EU public tenders, including some with hidden links to sanctioned individuals and others that are Russian-controlled without a tie to a sanctioned person.

All these high-risk firms most likely should not have been awarded public tenders since the introduction of EU sanctions, it claimed. "We expected a drop in the tender awards to the potentially sanctioned companies. In 2022 this did not happen," said Jiri Skuhrovec, director of Datlab.

Datlab's report is worrying for the European Commission and EU member state governments, which since Russia's aggression in Ukraine began in 2014 has sanctioned 1,473 individuals and 207 entities in 10 rounds of sanctions. Yet the study highlights the challenges faced by authorities in implementing these sanctions, which have been criticised in several quarters, notably Hungary, for being counter-productive and ineffective. An 11th round of sanctions is currently being prepared and is expected to meet stiff resistance.

Overlaps between sanction lists of Ukraine, USA and EU. Image: Datlab

The think tank provided several reasons for this situation, with one possible explanation being that public buyers lack trustworthy data on company ownership structures. "We demonstrated that...