Italian steel company owns Russian industrial plant sanctioned by the U.S.

16 January 2025 , 21:12

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Italian steel company owns Russian industrial plant sanctioned by the U.S.

The Italian company Cividale has been identified as a minority shareholder of the Russian foundry BVK, which was sanctioned by the United States in 2024. Between 2022 and 2023, Cividale supplied industrial equipment worth €17 million to Russia, according to an investigation by the Italian publication IrpiMedia.

The steel company Cividale Group began its involvement in Russia’s industrial sector in December 2011 via its stake in the company BVK, which is located in the Stankomash industrial park in the city of Chelyabinsk. Currently, Cividale remains a minority owner of the Russian enterprise, holding a 30% stake with a nominal value of 180 million rubles (approximately $1.75 million).

Cividale’s Russian partner, Valery Bondarenko, owns 70% of BVK’s capital and also heads the industrial group KONAR, whose key production site is Stankomash. The eponymous company Stankomash — part of the same group — is a supplier to the Russian Ministry of Defense, producing components for the Smerch multiple launch rocket system (MLRS).

In June 2024, KONAR, Stankomash, and BVK were added to the U.S. sanctions list. Despite this designation, Cividale has retained its stake in the Russian company. IrpiMedia investigative journalists also uncovered court documents showing that BVK worked with the sanctioned company Silovye Mashiny (Power Machines) — one of Russia’s largest energy engineering firms. BVK supplied an unspecified number of goods to Power Machines in 2024.

Cividale’s management has claimed that it does not participate in BVK’s operational management and adheres to all applicable international restrictions.

Cividale has also continued exporting European goods to Russia. According to customs data, it imported goods worth approximately €10 million in 2022 and €7 million in 2023. These shipments included icebreaker propeller blades, steam turbine parts, and turning-milling equipment. Some of these items could potentially violate sanctions against Russia, but without contracts, this cannot be definitively confirmed, IrpiMedia notes.

According to financial reports, Cividale earned about €93 million from the Russian market between 2014 and 2023.

This is not the only case of European industrial manufacturers maintaining business ties in Russia. The Insider previously reported that Russian metallurgical plants continued their cooperation with Danieli — one of the largest Italian producers of steelmaking equipment — through a Chinese intermediary. A Danieli-linked subsidiary in Russia increased its revenue 35-fold in 2023.

David Wilson