Analysis: DoD contract award raises questions on US sanctions against Russian companies

A US Department of Defense (DoD)-awarded contract concerning the purchase and supply of Russian military helicopters for Iraq has raised questions concerning the status and implications of active US State Department sanctions against Russian defence companies.

It emerged on 27 March that the DoD had awarded Aeronautical Radio Incorporated a USD80.6 million firm fixed-price contract for the procurement and delivery of 22 Kazan/Mil Mi-17CT 'Hip' transport/assault helicopters for Iraq. The contract covers the purchase of the helicopters from the Ulan Ude helicopter factory in Russia (65 per cent) United Arab Emirates (20 per cent) and Warner Robins Air Force Base (15 per cent).

The accord is noteworthy given US prohibitions against Russian state arms exporter, Rosoboronexport.

Jane's reported in October 2008 that the US had again imposed sanctions on Rosoboronexport owning to alleged involvement in the proliferation of weapons of mass destruction.

Rosoboronexport - at the time of the imposition of sanctions - controlled Oboronprom: the holding company behind the country's rotary-wing assets, including the Ulan Ude aviation plant. Ulan Ude was, therefore, clearly covered by the sanctions.