Russian firms shipped tens of thousands of tons of wheat and peas out of occupied parts of Ukraine in 2023 to EU member Spain, NATO member Turkey, and Azerbaijan, the investigative unit of RFE/RL’s Ukrainian Service, Schemes, and its partners have found.
Similar amounts of barley and corn reached Moscow allies Iran and Syria, which have an established track record of buying Ukrainian grain appropriated by Russia, Schemes, the Ukrainian hacker group KibOrg, the Belarusian Investigative Center, and Vyorstka, an independent Russian-language media outlet, determined in an investigation based on official Russian documents and other sources.
At least 6.4 million tons of wheat alone were harvested from Russian-occupied Crimea and Russian-held parts of the Donetsk, Kherson, Luhansk, and Zaporizhzhya regions in 2023, according to satellite estimates by NASA’s Harvest program, which tracks food-security threats. SeaKrime, a nongovernmental Ukrainian project that tracks Russia’s illegal grain shipments from Ukraine, has reported that 2 million tons of that harvest were shipped abroad from Crimea’s ports.
Such sales undermine Ukraine’s war-battered economy and provide Russia with revenue to finance the full-scale invasion of Ukraine, now in its third year.
For 2023, Schemes and its partners documented Russian sales of nearly 35,000 tons of wheat, barley, corn, and peas from the Kherson region and Crimea at discounted customs rates.
Hacked documents from Kherson’s occupation administrators, leaked Russian customs data, and information from the online trade database Import Genius confirmed the role of at least four Russian companies – Agro-Fregat, Pallada, Sim-Trans Group, and TD Fregat – in these transactions.
One of these companies, Pallada, has a remote connection to the general contractor for construction of a massive residential complex on Russia’s Black Sea coast known as “Putin’s palace.”
Though Russian customs and occupation-administration documents show that the products came from the Kherson region and Crimea, rather than from Russia, whether the buyers ever questioned the origins of the products they were purchasing is unclear. None agreed to discuss the matter.
How It Works
The Kherson region, part of Ukraine’s breadbasket, boasted a record harvest of 3.1 million tons of grain in 2021 – a bounty that attracted Russian firms once Russian forces occupied parts of the southern region in 2022.
Satellite data in 2022 showed trucks traveling from Kherson and the neighboring Zaporizhzhya region, also partially Russian-occupied, to Crimea for shipment abroad.
In 2023, Russian companies shipped an estimated 6.2 million euros ($6.7 million) worth of agricultural products from the Kherson region at discounted Russian customs rates or duty-free, according to Russian customs data and contracts from the occupation administration.
Volodymyr Saldo, an ex-mayor of the city of Kherson who is the top occupation official in the Russian-held part of the region, has the power to approve or reject the decisions of a commission that assigns these discounts.
In 2023, about a dozen Russian companies applied for the special rates.
The commission’s decisions enabled Schemes and its partners to trace Russian companies’ illegal sales of Kherson’s agricultural products abroad.
European Union
Since Russia’s full-scale invasion of Ukraine in February 2022, the European Union has banned over 91.2 million euros ($97.6 million) worth of Russian imports but has avoided barring Russian-EU trade in food and health products “in order not to harm the Russian population,” an EU explainer states.
That spells opportunity for Russia’s Agro-Fregat, a wholesale agricultural exporter, whose train cars RFE/RL’s Ukrainian Service has photographed in Crimea. In a 2022 article, Oleksiy Makeyev, a Ukrainian Foreign Ministry special envoy on sanctions, denounced Agro-Fregat, based in southwestern Russia’s Rostov region, and seven other Russian firms for exporting “stolen grain” from Ukraine.
Peas also make up that portfolio. Russian export data shows that, in September 2023, Agro-Fregat sent, as part of a 4,500-ton shipment to Spain, nearly 2,674 tons of peas from the Crimean port of Sevastopol. Agro-Fregat has been receiving Russian quality certifications for Crimean peas since 2022, according to Russia’s Federal Accreditation Service.
In 2022-23, Spain ranked as the second-largest importer of peas exported by Russia after Turkey, the Russian news agency Interfax reported.
A cargo manifest obtained by SeaKrime, a section of the Myrotvorets group, identified the recipient of the 4,500-ton pea shipment as Agro-Fregat’s Spanish customer as Cereales Y Harinas Garsan S.L., a company in Spain’s southeastern city of Lorca that says it distributes foodstuffs to 12 countries.
Cereales Y Harinas Garsan did not respond to an April e-mail from RFE/RL’s Ukrainian Service. In an e-mail to RFE/RL in September, three months after the initial publication of this article in June, Cereales Y Harinas Garsan said that its suppliers had “confirmed the Russian origin of the cargo” in question.
It also said that it “[has] no and [had no] relationship with” Agro-Fregat. This statement reflects the fact that while Agro-Fregat was the exporter and Cereales Y Harinas Garsan was the recipient, the purchase was made through another company, the Dubai-based commodity trading firm Mercury, which is identified in documents as the seller.
Among the documents attached to a subsequent e-mail from Cereales Y Harinas Garsan was a letter from Mercury stating that “all of the product is of Russian origin and absolutely none is from [the] Crimean region” or any other Russian-occupied part of Ukraine.
“The relationship between the exporters and Mercury is of their responsibility. It is their obligation to confirm that the goods do not come from [Russian-occupied parts of Ukraine], and that the documents are issued by the Russian authorities in accordance with the requirements of the European Union,” Cereales Y Harinas Garsan said in a letter attached to the second e-mail.
It also said the goods were loaded in Port Kavkaz, a Russian port across the Kerch Strait from Crimea, onto the Lila, a vessel chartered by Mercury for the delivery to Spain.
However, a cargo manifest obtained by Schemes shows that just under 2,674 tons of peas were delivered by Agro-Fregat from Sevastopol to Port Kavkaz on a different vessel, the Alfa M, and that the cargo was transferred to the Lila there. Shipping schedules also indicate the Alfa M traveled from Sevastopol to Port Kavkaz at the time in question.
In a May 25 phone call with Schemes, Agro-Fregat CEO Dmitry Lapkin denied any knowledge of shipments from the Kherson region.
Turkey, Too
But Agro-Fregat routinely exports from the Kherson region: In June and July 2023, it requested permission from the commission to export 25,000 tons of wheat and meslin, a mixture of cereals and legumes, at discounted rates. The buyer, according to occupation administration documents, was the Turkish company Velar Tarim Sanayi ve Tic. A.S (Velar), headquartered in the city of Adana.
Turkey, which exports military goods to Ukraine, ranked in 2022-23 as the main importer of grain exported by Russia, according to agribusiness consultants APK-Inform.
At least 9,554 tons of the wheat and meslin for Velar, according to a Russian government itinerary confirmed by tracking by MarineTraffic, a shipping intelligence site, traveled on August 7, 2023, from Crimea’s Sevastopol Bay to Port Kavkaz on board the Alfa M, and thence, two days later, on to Turkey’s Mediterranean port of Mersin on board the St. Olga.
Velar did not respond to questions about this shipment.
Azerbaijan
Turkey’s South Caucasus ally Azerbaijan, which has close ties with Moscow, has described itself as “a loyal and dear friend to Ukraine.” It also is a regular customer for Russian-expropriated wheat from Ukraine.
Wheat imports classified as Russian, in fact, narrowly outranked petroleum products in 2022 as Azerbaijan’s main Russian import, valued at $294 million, according to the trade data site OEC.
The Moscow-based Sim-Trans Group describes itself as one of the top three wheat exporters to Azerbaijan. In 2023, it exported the ruble equivalent of just under $410,000 worth of grain, according to an official Russian foreign trade database, to the Baku-registered company Diba.
The origin of all these wheat shipments is unclear. But in 2023, Sim-Trans Group received permission from the commission to send Diba up to 2,200 tons of grain from Kherson, occupation-administration documents show.
Sim-Trans Group did not answer phone calls about this shipment. Diba did not respond to requests for comment.
Iran And Syria
One Russian company, Pallada, LLC, which sent at least 15,400 tons of Kherson barley under a discounted Russian customs rate in 2023 to Iran’s Persian Gulf port of Bandar Imam Khomeini, has a distant connection to sanctioned Croatian businessman Kresimir Filipovic, who Russian media have reported was involved in the construction of a luxury estate in Gelendzhik on Russia’s Black Sea coast that was allegedly built for Russian President Vladimir Putin.
Pallada was registered as a grain wholesaler in the southwestern Russian city of Rostov-on-Don a few weeks before the full-scale invasion of Ukraine.
Its minority owner is Megapolis-Invest, a Russian corporate management firm that previously controlled a company, Waveform Investments, formerly majority owned by Filipovic, according to the business database KonturFocus.
The independent media outlet Proyekt has identified a Filipovic-owned business, Velesstroi, as the general contractor for construction of “Putin’s palace.”
The extent of Filipovic’s involvement in Pallada, if any, is unclear.
The firm’s majority owner, according to the Russian business registry SBIS, is Sergei Kuznetsov, a 47-year-old Muscovite.
Kuznetsov did not respond to Vyorstka’s May 31 question via Telegram about whether he is Pallada’s nominal owner in favor of Megapolis-Invest and Filipovic.
Another Russian exporter, the Moscow-based TD Fregat LLC, also declined to comment. In May 2023, it received a customs-duty discount on 3,000 tons of Kherson corn as part of an 8,000-ton export from Crimea to the Syrian port of Latakia.
TD Fregat, which says it “specializes in complex operations in the grain industry,” did not respond to a request for elaboration.
