The Big Repairs

Hundreds of stores, thousands of employees, millions of auto parts. The international holding of Belarusian origin Armtek made a name for itself by selling auto parts for foreign cars. Sanctions, however, have put this successful business at risk.

Buro discovered that Armtek services Lukashenko's car collection and circumvents sanctions. And this is thanks to this company that dual-use goods are supplied to warring Russia.

AUTO PARTS FOR LUKASHENKO'S GARAGE

Brake discs and pads, bearings and shock absorbers, air and oil filters. The state enterprise Beltransspetsavto regularly purchases auto parts for its vehicle fleet. The top three suppliers include the Belarusian company Evrozapchast, which is part of the Armtek group.

Since 2022, Evrozapchast has won about 250 auctions for the auto parts supply for Beltranspetsavto. Parts for Lukashenko's fleet were purchased primarily from one source, which is considered a simpler and less competitive procedure for selecting a winner. Nearly 100,000 Belarusian rubles were allocated from the state budget. Evrozapchast also serviced the KGB's operational fleet and other security agencies after the brutal suppression of Belarusian protests.

FAMILY BUSINESS

The Armtek group of companies was created by brothers Vadim and Oleg Grinkevichs. They rank in the top 20 successful businessmen in Belarus. Having started their business in the mid-90s, over time, they became leaders not only in our country but also gained recognition in the larger markets of Russia, Kazakhstan, and other countries. Armtek positions itself as the largest auto parts distributor in Eastern Europe. With hundreds of stores, the group of companies offers more than 500 thousand parts in stock and 60 million parts to order for passenger cars and trucks of European, American, Japanese, Korean, and Russian brands. The turnover is about a billion dollars per year.

Vadim Grinkevich. Source: belmarket.by

Oleg Grinkevich. Source: belmarket.by

Today, Armtek is a branched network of dozens of companies not only in Russia, Belarus and Kazakhstan, but also in Germany, Ireland, Hong Kong, the UAE, and other countries. This group of companies does not produce auto parts but rather imports them from abroad. A major place in this business is taken by the German company ATH&S GmbH, which until recently was responsible for Armtek’s trade flows.

ATH&S GmbH has no website or social media presence, but it regularly publishes corporate reports in the German register. From them, we learned interesting details of the Grinkevich family’s business.

The ATH&S GmbH head office is located in the German city of Bielefeld, and the general cargo warehouse with an area of ​​10 thousand square meters is situated near Warsaw. Based on the 2022 report, the German company placed orders for the production of auto parts at other plants in 12 countries – mainly in China, Turkey, and the EU. Then it sold the finished parts in Eastern Europe through a distribution network. In essence, ATH&S GmbH played the role of an intermediary, known on the market mainly under its brand name Stellox.

The sole owner of the German company is a mysterious woman named Maria Taylor. She received a bachelor's degree in philosophy and economics at the London School of Economics, then worked at a major audit and consulting corporation PricewaterhouseCoopers and an international investment company Liongate Capital Management. She now works at the Armtek group of companies. Maria Taylor is more than just an employee or an asset holder. Buro found out that she is also the daughter of Oleg Grinkevich, whose address of residence is listed as Dublin.

Maria Taylor. Source: pantek.ie

The main sales countries for ATH&S GmbH are Russia, Belarus, and Kazakhstan. Moreover, Russia is the most attractive destination, where the total volume of the auto parts market for servicing foreign cars was estimated at $21 billion last year.

In the Russian market, ATH&S GmbH worked closely with the company A.P.R. This is the key asset of the Grinkevich family in Russia. The company has 85 subsidiaries throughout the country, and its staff exceeds 5,000 people.

Customs data showed that in 2020 and 2021, A.P.R. purchased approximately a third of all imported auto parts from the German company ATH&S GmbH directly or on a commission. In money terms, this is more than $100 million in two years. Business was gaining momentum, but the situation changed dramatically in 2022 when Russia attacked Ukraine.

KAZAKHSTANI BROTHER

After the full-scale invasion began, Western car brands left the Russian market. The European Union has banned the sale of luxury cars and auto parts to Russia to deprive the Russian elite of the opportunity “to enjoy their lavish lifestyle while bombs fall on innocent people in Ukraine”.

The sanctions have become a threat to Armtek because Russia is the holding’s main sales market. Its loss would have caused serious damage to the business, whose pre-war turnover amounted to hundreds of millions of dollars a year. But shrewd businessmen found a way out. Under sanctions, they organized the supply of auto parts through third countries, which are not subject to economic restrictions. And they earned even more from this than before the war.

Armtek warehouse. Source: etp-armtek.com

In 2022, these German and Russian companies almost stopped engaging in direct deals. ATH&S GmbH abruptly changed its key customer, and A.P.R. changed its key supplier. Surprisingly enough, it turned out to be the same company from Kazakhstan. The only thing that hasn't changed is the brand name. Auto parts under the Stellox brand continued to travel to Russia, but now by roundabout routes.

Unlike Russia and Belarus, Kazakhstan is not subject to Western sectoral sanctions. Companies from this Central Asian jurisdiction are often used as a front for delivering goods in circumvention of European restrictions. Trading data showed that this is exactly what happened to Grinkevichs' business.

In its latest report, the German company ATH&S named its main client – ​​ZapchastTrade. It was this Kazakhstani company that became the major auto parts supplier for A.P.R. According to customs data, in 2022, it sold goods worth almost $20 million to the Russian company, and in 2023, the volume grew to $60 million.

ZapchastTrade is another company of the Grinkevich brothers. Created in 2017 to enter the Kazakhstani market, it played a significant role – in the face of Western sanctions, A.P.R.'s turnover approached a billion dollars.

THROUGH THIRD COUNTRIES

The Russian distributor doesn't purchase auto parts through Kazakhstan alone. Analysis of customs data showed that firms from Turkey, China, the UAE and other countries are involved in the supply chain. These jurisdictions are also used to circumvent sanctions. Last year, A.P.R. imported into Russia thousands of auto parts under sanctions, including brakes, suspension kits, radiators, shock absorbers, clutches, starters, generators, bumpers, mufflers, gearboxes, spark plugs, mirrors, stabilizers, and many other parts.

The countries of origin of these auto parts in customs declarations are mainly Turkey and China, but there are also Italy, Spain, and Poland. However, only one manufacturer is listed – the German company ATH&S GmbH. Last year, the volume of supplies from this manufacturer alone exceeded $76 million. In addition, A.P.R. imported car parts from other well-known German brands to Russia. These parts were produced both in Europe and abroad. The total volume of imports last year exceeded $270 million.

SENSITIVE GOODS

We have noticed one particular category of goods that A.P.R. imports into Russia. These are bearings, which are considered dual-use goods. Western countries have put them on a special sanctions list because they could be used in Russian military equipment on the battlefield in Ukraine.

Based on customs data, last year A.P.R. imported over 17 thousand bearings of European origin into Russia in circumvention of sanctions. The total amount of deliveries exceeds $340 thousand.

This year, A.P.R. continued to purchase bearings through third countries. From customs data, we saw that supplies are made primarily on behalf of the Emirati company Texco FZE. It is now responsible for promoting the Stellox brand instead of the German company ATH&S GmbH.

Dubai. Source: lonelyplanet.com

Texco FZE was established shortly after the full-scale invasion, in May 2022. The CEO and Managing Director of the Emirati company are or were employed by Armtek.

The United Arab Emirates has become a haven for Armtek after the sanctions were imposed.

SAFE HAVEN

Flashy Dubai is Vadim Grinkevich's favourite vacation spot. The businessman celebrated the New Year 2024 in this city with his daughters. About ten years ago, he bought three luxury apartments in Dubai for almost $2 million and makes money by renting them out. This is not Grinkevich’s only business in the United Arab Emirates.

In the Dubai registry, he is listed as a manager of the Emirati firm Pantek FZCO. It has a subsidiary in Ireland with a similar name, Pantek Automotive Limited. In its 2021 report, the Irish company positioned itself as the headquarters of the Armtek Group. Now it seems that the central office of the group of companies has moved to the UAE.

The Middle Eastern country attracts wealthy people from all over the world because of its reputation as a tax haven with high financial secrecy. UAE companies do not disclose their beneficiaries and financial indicators. Local authorities do not ask unnecessary questions about the origin of the money and rarely comply with extradition requests. Vadim Grinkevich had experience of criminal prosecution by the Belarusian authorities. In this regard, the UAE is a safe place to store your assets in case of unforeseen situations.

The UAE also attracts businessmen from countries such as Russia and Belarus because of its weak enforcement of Western sanctions.

While Vadim Grinkevich posts videos on his social media from concerts of Yuri Shevchuk and Andrey Makarevich, who are known for their uncompromising position against the war in Ukraine, the group of companies he founded – Armtek – continues to gain momentum on the Russian market. The safest way to do that now is from the Emirates Haven.

Vadim Grinkevich did not answer our calls. Oleg Grinkevich said that Armtek does not cooperate with state-run organisations in any country. In his words, this rule has been part of the company's policy since the 90s to avoid corruption. However, information about Armtek's contracts with Belarusian government agencies is posted on the electronic trading platform of the National Center for Marketing and Price Study.

The businessman further assured that Armtek does not violate international sanctions, although his comment seems strange.