Russia and Iran struck drone production deal to bypass sanctions - report

A resident walks next to buildings and cars heavily damaged by a Russian missile strike, amid Russia's attack on Ukraine, in Odesa, Ukraine November 25, 2024.
A resident walks next to buildings and cars heavily damaged by a Russian missile strike, amid Russia's attack on Ukraine, in Odesa, Ukraine November 25, 2024.

Russia and Iran have coordinated a multi-billion-dollar project to produce Iranian-designed drones inside Russia for use in the war in Ukraine, according to report published Thursday by the Washington-based research organization C4ADS.

Leaked records reviewed by C4ADS showed that the Iranian company Sahara Thunder collaborated with the Russian firm Alabuga JSC to transfer the technology and expertise needed to produce a variant of the S-136 drone, which Russia used in military operations against Ukraine.

“This collaboration spanned multiple years and persisted in the face of global censure and sanctions against both countries,” the report said.

C4ADS said Sahara Thunder was “deeply embedded in state defense networks” and operated as “a prime example of Iran’s use of middlemen to carry out its activities,” while Russia leveraged Alabuga JSC for defense industrial use. Both firms had long-standing ties to their respective governments, the report said.

The investigation found that the companies used a UAE-based intermediary to conduct parts of their partnership, allowing them to “minimize evidence of direct contact in the UAE’s low-barrier business environment.”

Alabuga JSC made payments through wire transfers via the UAE and gold shipments. “The combination of the two offered agility in circumventing sanctions,” the report said.

C4ADS said the cooperation expanded beyond the drone project. “Reciprocal visits by both parties served not only to expand UAV localization but also focused on other defense industrial domains,” it said.