Which Italian companies are doing business in Russia even after the embargo?

“Happy and proud.” So Peter Bows commented on his re-election to the European Parliament. He was the sixth most voted in the ranks of Fratelli d’Italia in the North-West. He had made headlines when he appeared on election posters with a cross expression and pointing a rifle at passers-by. After all, the hunting and small arms sectors make up a good portion of his electoral base. And it couldn’t be otherwise given his surname. Fiocchi Munizioni is a company that is over a century old, founded in 1876 in Lecco by Giulio Fiocchi to produce ammunition and cartridges. Today it is in its fifth generation, even if in the meantime the political affiliation has definitely changed: two great-uncles of Pietro Fiocchi helped the Resistance, slowing down the production capacity of the factory after September 8 and supplying weapons to the partisans. One of them, accused of anti-fascist and anti-German behavior, was captured and deported by the SS to a labor camp north of Munich.

70% of the shares were purchased in 2022 by the Czechoslovak Group, a Czech defense and aerospace giant that recorded revenues of over one billion euros in 2023 in the armaments sector alone. Stefano Fiocchi, Pietro’s cousin, remained at the helm of the company as director. The latter did not appreciate his cousin’s aggressive manifestos, distancing himself from them: “(Pietro) is only a minority shareholder. He was formally invited to avoid references to the company”. The MEP, in fact, holds 2.39% of the shares of Giulio Fiocchi spa. In 2022, Fiocchi Munizioni spa generated revenues of almost 200 million euros. Approximately 70% of these, however, come from the “industry and defense” sector while “hunting and shooting” stops at just over 20%. That is to say that the military sector is an essential sector for the company’s coffers. The desire to invest in the defense sector is also demonstrated by the choice of the new CEO of Fiocchi, appointed last January. This is Paolo Salvato, former vice president of Leonardo and even before that CEO of the Italian section of the Thales group.

On the export front, the main recipients are the United States (over 90% of Fiocchi exports). Here the company operates through its subsidiary Fiocchi of America Inc, in Missouri. Fiocchi-branded ammunition was also imported into Russia between March and September 2022, the months following the invasion of Ukraine. Official Russian documents do not contain the name of the exporting company. Stefano Fiocchi declared that the company “autonomously suspended all supplies to Russia, even before receiving any indications to this effect from the competent Authority, which subsequently suspended all export authorizations.”

According to a constantly updated database of Yale University, there are in total 1,028 major global corporations have withdrawn or ceased all operations in Russia following the invasion of Ukraine. The Italian ones represent 1.4%, a dozen therefore. Of the approximately 450 Italian companies that carried out activities in Russia before the war, the vast majority remained, preferring to limit or suspend their activities while waiting for better times. An attitude of caution but which can have unforeseen consequences. The least rosy scenario is the one that hit Ariston last April, when the Kremlin signed a decree for the nationalization of the company, which in fact sounds like an expropriation, as has already happened to other European giants, including the French Danone and the Danish Carlsberg.

Among those who do business as usual in Russia there are Camozzi Automation spa. Founded in Brescia in 1964, it is one of the leaders in Italy in industrial automation components and in Russia it holds 90% of the shares of Kamozzi Pneumatika. The Russian branch has dozens of distributors throughout the country, at least three offices in Moscow. One of these is located a stone’s throw from the Kremlin and another, more peripheral, in a street named in 2021 after the founder Attilio Camozzi: “Great friend of Russia”, says the plaque outside the offices that commemorates the foundation of the Russian branch of the company in August 1991. Data collected by Russian customs indicate that Kamozzi Pneumatika, from February 2022 (the beginning of the Russian invasion of Ukraine) to December 2023, imported goods worth 50 million dollars from the Italian parent company. Customs data from various databases indicate that In 2023, Camozzi Automation made almost 300 shipments to the Moscow branch for a value of approximately 5 million dollars of goods subject to restrictions by the European Union. Many of the goods sent to Russia by Camozzi are in fact considered dual-use products, that is, a vast range of technologies that, although designed for civilian use, can also be used by the military industry. In order to be shipped, they always require authorization from the Ministry of Foreign Affairs: the European regulation provides that authorization for export to Russia should not be granted if there is reasonable suspicion that it could end up in military hands. Asked by L’Espresso about any authorizations granted to Camozzi, the Farnesina explained that “these are not information that can be disclosed, given the nature of the information and the need to protect commercial confidentiality and personal data.”

Camozzi Group told L’Espresso that “there were no irregular exports or exports for which problems were raised by the relevant authorities,” adding that “the export of our automation components is not subject to authorizations.” One of the product codes of the goods sent by Camozzi refers to electrical connectors, simple but essential components that connect two or more electrical circuits together. Eleven of these shipments arrived at the Russian subsidiary between January and August 2023, while the same product code had been included in December 2022 in the European Commission’s list of components that can be used for the production of weapons, such as Kalibr cruise missiles, Alligator combat helicopters and Russian-made Oral-10 drones. “The reason behind export controls on these types of components is to prevent adversaries from using them against you or your allies,” explains Diederik Cops, senior researcher at the Flemish Peace Institute. “Many of those recovered on the battlefields in Ukraine were produced in the last two years or less. Preventing its export would certainly have an immediate impact on Russian military capabilities.”

The camozzi.ru website has been unavailable since October 2022, eight months after the Ukrainian invasion. The Russian branches of Camozzi, which until then were present on the group’s website, are no longer listed. Court documents from the Moscow court indicate that among the customers of Kamozzi Pneumatika, at least until 2022, was the joint-stock company Tikhvin Freight Car Building Plant, a manufacturer of freight cars based in the city of the same name east of St. Petersburg and sanctioned by Ukraine since October 2022. The dispute concerned small supplies “which occurred in the very first months of 2022,” Camozzi explained, adding that “since then the Russian branch has no longer supplied the company mentioned.”

Camozzi is also active in the attacked country, where it has not been sanctioned. In Ukraine, its offices are located in all the major cities. Among the most active locations is the one in Simferopol, in occupied Crimea, where the company is currently looking for a dozen IT engineers, a sign of its full operational capacity. Here, an hour’s drive from the Russian Navy headquarters in the Black Sea, Camozzi annually organizes internships for students, and future engineers, of the Bauman State University of Moscow. It is one of the oldest universities in Russia, among the most appreciated in the engineering sector and under American sanctions since 2023 for its contribution to the war effort: it is in fact a partner in numerous joint ventures with Rostec, the Russian state conglomerate responsible for the production of 80% of the weapons used against Ukraine. “It is surprising that a Western company is operating in both Russia and Ukraine and also in the occupied territories,” comments Cops, who adds that “producing dual-use components in Russia or in occupied Crimea makes it almost impossible to control where these products will end up.” Camozzi has specified that it has completely stopped – without specifying since when – supplies and shipments to its Russian subsidiary, which remains fully operational, and that it is acting “in full compliance with applicable regulations.”

Also the Brescia Beretta groupa manufacturer of hunting and defense weapons, continues to have stakes in Russia. Direct sales ceased at the beginning of the invasion, but a Russian importer, owned by Beretta, continued to import rifles and ammunition from Brescia through triangulation with countries outside the European Union, such as Turkey. Russkiy Orel, this is the name of the company, was founded more than 15 years ago to directly distribute Beretta weapons in Russia and today has a turnover of 10 million euros. The investigation by IrpiMedia reported it and, after publication, the Russian company’s website was taken offline. On June 12, the US Treasury Department sanctioned Russkiy Orel, which is still 57.95% owned by Beretta Holding. Beretta did not respond to a request for comment on the sanctions on its subsidiary.

The Fiocchi group’s reply to our article
The article referring to the Fiocchi Group is misleading and captious. It is necessary to clarify that the Fiocchi Group has not sold, neither in 2022 nor subsequently, military or civilian material to Russia. And furthermore, obviously, as per the indications of the Ministry of Foreign Affairs, the Fiocchi Group scrupulously adheres to the ban on relations with Russia, imposed by the embargo. Therefore, the substance, tone and title of the article, as far as it concerns the Fiocchi Group, are misleading.

Our answer
Nowhere in the article is it indicated that Fiocchi sold ammunition to Russia, but it is specified that Fiocchi-branded ammunition was imported into the country in question and in the time frame indicated, as per Russian customs documents in the journalists’ possession.