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US Treasury and State Department include Russian rolling stock manufacturers in new sanctions lists

24 May 2023
Reading time ~ 3 min
Production of metro trains at Metrowagonmash
Production of metro trains at Metrowagonmash. Source: Metrowagonmash
Belov Sergey, Editor-in-Chief, ROLLINGSTOCK Agency
Reading time ~ 3 min
Savenkova Ekaterina, Editorial Contributor to International Projects of ROLLINGSTOCK Agency

US: These companies are Metrowagonmash (part of TMH) and Uraltransmash (part of Rostec). The relevant decisions made late last week are another round of sanctions against Russia. The US Treasury imposes sanctions against natural and legal persons if their overseas activities threaten the US national security, while the US State Department links its decisions to the Ukraine conflict and its aim to increase costs for Russia’s economy.

As for Metrowagonmash, this is the first time that sanctions have been extended to a business that only produces rolling stock and components: the plant is known as a producer of metro cars (more than 700 cars yearly) and diesel multiple units. The US State Department explains that the company is involved in the production of military components. However, Metrowagonmash ceased such activities in 2009 when their production was transferred to the Mytishchi Machine-Building Plant which later joined Kalashnikov Concern (part of Rostec). While this company has been under sanctions for several years, it was included in both lists, too.

By now, TMH and Metrowagonmash have not made any statements. The Tbilisi mayor’s office has already invoked the new sanctions to try once again to terminate a contract with the latter for the supply of metro trains. Although earlier this year, the capital’s authorities decided not to terminate it because a new tender could increase the contract price.

As for the tram manufacturer Uraltransmash, a significant volume of its production is for the needs of the defence industry. It is a subsidiary of Uralvagonzavod, a part of Rostec Corporation. In April, Rostec announced that Uraltransmash would leave its mother company to join another holding of Rostec related to the production for the artillery sector. Uralvagonzavod itself is one of Russia’s largest freight car manufacturers producing armoured vehicles, which has been under US sanctions since 2014.

UPDATED: On June 14, Metrowagonmash announced that it is working to remove itself from the US State Department’s sanctions list. The plant points out that the “participation in the production of military equipment” attributed to it by the US State Department is erroneous. “The enterprise specializes in the manufacture of exclusively civilian products: metro cars, diesel multiple units and spare parts, as well as the overhaul, modernization and maintenance of these products”, Metrowagonmash notes in an official statement. Now the company is studying the possibility of applying to the competent authorities of the United States in order to be removed from the sanctions list.