Et tu, Beretta? Italian companies continue to supply weapons to Russia no matter what

RU

This fall, a sniping competition took place in Russian-occupied Crimea, the Ukrainian peninsula illegally annexed by Moscow in 2014. Participants from various Russian paramilitary groups, along with civilian marksmen showcased not only their skills but also an impressive array of weaponry. The winner of the tournament used an American rifle, the SRS Desert Tech, chambered in 6.5 Creedmoor. Others in the top five utilized firearms such as the Finnish Sako TRG 22 Lapua Oy, another Finnish Tikka, the Austrian Steyr Mannlicher, and an additional Tikka T3. It's noteworthy that these imported rifles were chosen in a country where rifled barrels arms imports were restricted by the European Union (EU) a decade ago, shortly after Russian special forces soldiers —with their insignia conspicuously removed — began appearing on the streets of Crimea in the guise of “local self-defense forces.” Notably, the production and importation of three of these rifles into Russia is associated with a single arms conglomerate — Beretta.

European arms on display next to the Kremlin

To gauge the success of imported firearms in Russia, one simply needs to attend the annual arms exhibition, OrelExpo. In October 2023, industry professionals and enthusiasts gathered at Moscow’s Gostiny Dvor, an ornate hall right next to Red Square, for this event.

Despite the country being under American and European sanctions, attendees were treated to a diverse array of firearms. Alongside Kalashnikov rifles, visitors could explore, check, and purchase Finnish Sako and Tikka rifles, Czech Czeska Zbrojovka pistols, American Barrett and Desert Tech rifles, Austrian Glock pistols, German Blaser rifles, and numerous other firearm brands hailing from the United States, the United Kingdom, and various EU countries. While EU lawmakers were deliberating over whether to include knitting needles in their twelfth package of sanctions, a significant exhibition was underway in Moscow, showcasing a multitude of firearm samples, half of which had been banned from import into Russia since 2014.

One man was at the center of the show. Mikhail Khubutia and his close associates own not only the luxurious Gostiny Dvor complex itself (along with the company that makes the exhibition stands used for its various events) — they also control a number of weapons importers and distributor networks catering to Russian security agencies and private buyers.

In November 2023, the German investigative journalism outlet Correctiv discovered that, since the start of the full-scale war, over 7000 small weaponry units and more than 8 million rounds, produced in the EU and the U.S., had been imported into Russia. As can now be revealed by The Insider in cooperation with IrpiMedia, Khubutia's companies accounted for the import of over half a million rounds and fifteen hundred rifles and pistols. These are primarily hunting rifles, but there are still hundreds of semi-automatic rifles and pistols among them that are used by the army and police.

Mikhail Khubutia, the arms baron

Mikhail Khubutia was born in the Republic of Georgia, served in the Soviet army in the Moscow suburb of Khimki, and later opened a cooperative with friends, which eventually grew into a trading business. He based his business on hunting — Khubutia's father was an avid hunter. Khubutia opened his first store, “Tsarskaya Okhota” (lit “The Royal Hunt”), in central Moscow, and even the city’s longtime mayor Yuri Luzhkov, who was in office from 1992-2010, attended the launch. Khubutia was friends with Soviet-era crooner Iosif Kobzon and had close ties with Boris Gromov, who later became the governor of the Moscow region.

Soon the store evolved into a network of Kolchuga gun shops, and Khubutia headed the non-profit partnership “Guild of Arms Sellers.” In 1999, at the age of 33, he became the Minister of Trade of the Moscow regional government and held this position until 2001. In 2005, he was appointed chairman of the Expert Council on Investment Activities under the Moscow government.

Simultaneously, Khubutia managed to become the “informal representative” of Georgia in Russia. According to Kommersant, during the 2008 Russo-Georgian war he acted as a negotiator. In 2014, he became a member of the Council for Interethnic Relations under the President of the Russian Federation and won several awards.

Yet Khubutia's main business is weapon sales. The numerous companies involved in this business are listed below:

• LLCs Kolchuga (lit. Chain Mail), Okhota (lit. Hunting), Orel (lit. Eagle), Russkiy Orel (lit. Russian Eagle), Smart Systems, and Test-Oruzhie (lit. Test Weapons) import weapons into Russia.
  
  
• LLCs Russkiy Orel, Orel Hunting, Okhotnik na Tverskoy (lit. Hunter on Tverskaya Street), Kolchuga-L, Okhotnik Rybolov Turist (lit. Hunter Fisherman Tourist), Smart Systems, as well as JSC Korolevskaya Okhota (lit. The Royal Hunt) and Firma Kolchuga (lit. The Chain Mail Company) sell these weapons in Moscow and the Moscow region.
  
  
• LLC Torgoviy Dom Shater (lit. Shelter Trading House) owns the Gostiny Dvor exhibition area, and LLC Expo-Service is the general contractor for exhibition stands.
  
  
• The weapons factory Ataman specializes in tuning Kalashnikov rifles and automatic weapons, manufacturing and retailing small-caliber weapons.

The dealership network of Kolchuga’s partners includes over a hundred firearms and hunting stores across Russia, from Sochi on the Black Sea coast to Yakutsk in the Far East.

Khubutia has also dealt with weapon certification: from 2010 to 2021, he supervised the National Certification and Testing Center for Civilian and Service Weapons, which during that time issued thousands of certificates for weapon imports.

Beretta, the Italian partner

One of the largest companies in Khubutia's arms business is LLC Russkiy Orel — “Russian Eagle.” This significant importer of firearms generated revenue of 908 million rubles by the end of 2022. Russkiy Orel holds two licenses for selling ammunition and trading in civilian and service weapons, along with their main parts. But what’s more important is the identity of the company’s owner and Khubutia's business partner.

On May 19, 2010, the Italian company Beretta Industrie S.P.A. acquired a 51% stake in Russkiy Orel. Then, after the annexation of Crimea, a series of deals led to a nominally different parent company, Beretta Holding S.A. Inc. (located in the Grand Duchy of Luxembourg), taking a 57.95% ownership share in the Russian firm.

Even today, two years after the start of the Kremlin’s full-scale war in Ukraine, Russkiy Orel’s homepage still literally states: “Official distributor of Beretta Holding in Russia. Regular wholesale supplies of foreign-made weapons, optics, and gear.” The website prompts hunters to register their Beretta rifles in order to get a second-year warranty for free.

Rifles and pistols for sportsmen and soldiers

According to Rosakkreditatsiya data, over the two years of war, Russia also continued to receive products from other firearms brands owned by the Beretta conglomerate: Benelli, Beretta, Beretta Benelli Iberica, Sako, Stoeger, and Tikka rifles, as well as Norma, RWS, and Sako cartridges. In the vast majority of cases, the importers of those weapons were either Russkiy Orel, which is directly owned by Beretta LLC, or various other companies owned by Khubutia and linked to Russkiy Orel.

The Italian manufacturer not only does not conceal its presence in Russia but has also launched advertising campaigns to increase sales. Since the beginning of the war, Russkiy Orel has organized at least six events for Russian marksmen under the Beretta and Benelli brands, including the Beretta Summer Cup 2023 this past June and a one-day Benelli tournament in May 2022.

Beretta-produced carbines find utility beyond the realms of hunting and sports. In the narratives of self-styled war reporters, Finnish rifles are frequently cited. For instance, Big Battle Panda recently recounted the combat operations of the Omut sniper group, highlighting their use of Finnish Tikka Hunter rifles chambered in 300 Win Mag.

During the previous summer, the Sverdlovsky shooting range played host to the MAGNUM military-applied tournament for sniper pairs and featured the use of Finnish Sako rifles, among other weaponry. Finnish rifles are also employed for the testing of Russian cartridges; for instance, the new Kentavr Super product line from the Barnaul Cartridge Plant underwent testing using both Russian Orsis and Finnish Tikka rifles.

Despite the discontinuation of direct shipments from Beretta and Benelli in February 2022, customs records compiled by the ImportGenius aggregator indicate that Khubutia's companies maintain at least two foreign trade partnerships. A Beretta-owned manufacturer sells weapons to a Turkish intermediary, and the Russian importer (which is also owned by Beretta) receives them without encountering any obstacles.

Working with the Kalashnikov Concern

Khubutia's companies serve as one of the primary distribution channels for Kalashnikov civilian products in Russia. Since 2010, when Beretta acquired a controlling interest in Russkiy Orel, Eduard Ioffe, a senior manager at Kalashnikov, has been associated with the Italian conglomerate. His career began at one of Khubutia's firearms distribution firms. Ilya Shumanov, director of Transparency International Russia, has identified Ioffe as one of the trusted associates of a powerful Putin ally, one who served with the Russian president during his tour as a KGB officer in East Germany: Rostec head Sergey Chemezov, whose state-owned defense conglomerate produces high-end weapons systems both for the Russian military and for export to international partners.

In December 2015, Ioffe was added to the sanctions list of the U.S. Department of the Treasury, and in April 2016, he was sanctioned by Canada as well. However, this did not prevent Ioffe from remaining a co-owner of a distribution company which continued working with Beretta until May 2018.

The Russian firearms magazine Kalashnikov also enjoys a close collaboration with Beretta. In a 2017 article Mikhail Degtyarev, the chief editor of Kalashnikov, recounts his numerous trips to the Benelli factory in Urbino, noting that the frequency of his visits to the Italian workshop had left him exhausted. In 2023, as Russia’s unprovoked war in Ukraine raged on, the magazine featured three announcements of new Benelli rifles and carbines. Additionally, the Beretta distributor Russkiy Orel includes the Kalashnikov magazine among its partners.

Olga Ioffe, the wife of Eduard Ioffe, is the sole owner of the company Fort, which, following the commencement of full-scale war, imported into Russia 75 Austrian Glock pistols and 490,000 NORMA TAC-22 caliber 22LR cartridges manufactured by Ruag Ammotec, a German company owned by Beretta.

Italian-Russian collaboration extends beyond the mere sale and promotion of firearms. Components from Italian manufacturers are integrated into Russian hunting rifles. In 2016, the Kalashnikov Concern introduced the new semi-automatic shotgun MP-156, the first Russian shotgun to feature an inertia mechanism.

According to the Kremlin-firendly Russian news site Lenta.ru, “a similar approach is employed for Benelli and Beretta firearms.” Nevertheless, the Russian factory struggled to replicate the technology developed by the Italians, evidenced by over half of the shells jamming in the Russian rifle after firing. Insights into how the Kalashnikov plant addressed these challenges can be gleaned from photos of the dismantled rifle posted on the guns.club forum in October 2022. The manufacturer's mark is visible on a component of the inertia system: Benelli Arms Systems (owned by Beretta).

In 2010, years before Crimea, Rostec had been in discussions with Beretta regarding the establishment of a joint venture in Russia aimed at manufacturing hunting and sports weapons, as well as pistols for special services and law enforcement. Although that joint venture failed to materialize, with the Italians announcing their withdrawal from the project in 2013, it appears that some level of cooperation — even if it is a less formal one — has developed.

Marocchi and Breda also in the game

Another Italian firearms manufacturer with strong business connections to the Russian distributor is CD Europe S.R.L., known for producing rifles under the Marocchi and Breda brands. Its importer and distributor in Russia is LLC Italruzhyo. The sole founder of this company is Ivan Kurtz, who served in the Maritime Border Troops of the Soviet KGB from 1990 to 1992.

This Italian-Russian partnership has been ongoing since at least 2013. Despite the annexation of Crimea and the onset of full-scale war, supplies of Italian rifles have continued without interruption. LLC Italruzhyo is still listed on Marocchi's website as its partner in Russia, and the representative office of Marocchi Gun House in Russia is situated within the Italruzhyo store premises, according to the company's website.

Marocchi-branded rifles manufactured by C.D. Europe S.r.l. prior to the conflict, as indicated by state certificates of conformity, were brought into Russia by LLC Italruzhyo and LLC Attache. The latter continued to receive new shipments, with LLC Attache importing 275 Italian hunting rifles into Russia in 2023.

The Russian-Italian partnership was so intimate that Italruzhyo acted as the sole founder and proprietor of Marocchi Russia until its dissolution in 2019. In 2013, Italruzhyo even acquired ownership of the Marocchi trademark in Russia.

In response to inquiries about collaborations with Russian importers, a Marocchi representative stated that the last shipment to Russia occurred in November 2021 and that the Italian company had no information regarding the registration of their trademark in Russia. Interestingly, until 2021, Oleg Benedichuk, who concurrently owned 80% of Italruzhyo, held the position of vice president at CD Europe.

However, Marocchi's involvement in Russia goes beyond firearm imports; the company also participates in joint manufacturing ventures with Russian counterparts. Since at least 2008, Promtehnologiya (see The Insider’s report) has been assembling Marocchi Si12 semi-automatic inertia rifles using Italian components. All parts are sourced from Europe, with the Moscow plant solely responsible for the final assembly of the weapons.

The carbines assembled by Promtehnologiya remain available for purchase in stores across Armenia, Belarus, and Russia. A noteworthy incident involving the Marocchi Si12 occurred in Armenia in 2019, where its producer became embroiled in controversy. Previously, the Russian company had secured a contract with Armenia's Ministry of Defense for firearm supply, only to later accuse the department of malfeasance in the management of tenders. Furthermore, it was revealed that the Marocchi Si12 rifle, gifted to Armenia's Ministry of Defense, was registered under the name of Deputy Minister Makar Gambarian, rather than of the ministry itself.

Although Italruzhyo and Khubutia's companies are not linked at the ownership level, they share a common thread in the importation of Beretta products. From 2021 to 2023, LLC Italruzhyo imported ammunition from Ruag Ammotec (Germany) and Lapua Oy (Finland), along with Finnish carbines Tikka and Sako – in essence, ammunition and firearms produced by the Italian conglomerate.

At the same time, the Italian company CD Europe S.R.L. showed no hesitation in collaborating with the Kalashnikov Concern, which was already under U.S. sanctions at the time. In March 2021, firearms distributor LLC Izhevskiy Arsenal, a subsidiary of the Kalashnikov Concern, imported 150 Vero 12/76 hunting shotguns manufactured by CD Europe S.R.L. Such a transaction could only have proceeded with Italruzhyo's approval, as the importer required permission from the trademark owner to obtain the necessary documentation.

In 2014, the European Union enacted a ban on exporting rifled firearms to Russia. However, a decade later, Russia has found simple methods to circumvent these sanctions. Anti-material sniper rifles, chambered in .375 CheyTac, engineered to neutralize light-armored vehicles with bullets capable of penetrating brick walls, are falsely declared as “hunting rifles” and continue to flow into Russia through Customs Union countries — Belarus, Kazakhstan, Kyrgyzstan, and Armenia. Without robust sanctions enforcement, it seems that only a prohibition on the import of knitting needles might effectively address this issue.