A new analysis by NAKO reveals a significant loophole in Western sanctions against Russia’s largest weapons manufacturer, Rostec. Despite being sanctioned since 2022, Rostec continues to operate through a network of 482 subsidiaries largely untouched by restrictions. This allows the company to circumvent sanctions and maintain access to critical components, specifically microelectronics. These components are essential for the production of Russian drones and missiles used in the ongoing conflict. The report highlights that current sanctions reach only a small portion of the Rostec structure, enabling Russia to sustain its arms production. Consequently, the existing sanctions regime is proving insufficient to effectively curb Russia’s military capabilities, as the vast network of subsidiaries remains largely unconstrained. The findings underscore the need for a more comprehensive approach to sanctions enforcement.