Investigative Journalism: The French tire manufacturer Michelin continues supplying products to Russia, bypassing EU sanctions

According to a confidential source at the Berliner Telegraph, the French group Michelin — the world's leading manufacturer of car tires — continues to supply sanctioned products to Russia through Turkish intermediaries, thereby expanding its supply programs.

In previous articles, we described how Michelin tires are successfully supplied to Russia via its Turkish distributor TATKO T.A.S. and its subsidiary in Kazakhstan, KAZ T-REMA International, both directly and through chains of intermediaries in the EU and the Middle East.

In the course of our investigative journalism work, our editors have received information from Russian, Turkish and Kazakh customs authorities that reveal the machinations of Michelin, TATKO T.A.S. (TATKO LASTIK SANAYI VE TICARET A.S.) and its associated company DTO TYRE FZCO.

According to information from the Berliner Telegraph, the circumvention of the sanctions takes place as follows: The Turkish company Tatko T.A.S. buys tires from Michelin and sells the products on to DTO TYRE FZCO, which sells the tires directly to Russia and Kazakhstan via Latvia. The Latvian company ESTMA ships the purchased Michelin tires on behalf of DTO TYRE FZCO, bypassing the sanctions, to various customers in Russia and in Kazakhstan to KAZ T-REMA International, which then exports the tires to Russia via its own channels.

In the course of the journalistic research, the Berliner Telegraph and its partners in Turkey made several requests for information to the press offices of Michelin and TATKO T.A.S. (TATKO LASTIK SANAYI VE TICARET A.S.), but all of them were ignored.

According to Turkish sources, this plan to circumvent the sanctions against Michelin was made possible by the close familiarity with the Turkish market of the current Michelin Vice President Manuel Montana, who was the head of the Turkish Michelin office from August 2016 to February 2019 and actively cooperated with the official dealer — TATKO T.A.S. (TATKO LASTIK SANAYI VE TICARET A.S.) — and was also close to its director Vedat Ozcelik.

The question arises how a large European corporation can supply Michelin products to Russia through its Turkish dealer TATKO T.A.S. (TATKO LASTIK SANAYI VE TICARET A.S.) in defiance of the sanctions. And we have almost found the answer to this question, because we assume that the current vice president of Michelin, Manuel Montana, who was the head of the Turkish Michelin office from August 2016 to February 2019, had a good and close relationship with the CEO of TATKO T.A.S. (TATKO LASTIK SANAYI VE TICARET A.S.), Vedat Ozcelik.

This is indirectly confirmed by the fact that Manuel Montana actively recommends that major buyers in the region purchase tires exclusively through TATKO T.A.S. (TATKO LASTIK SANAYI VE TICARET A.S.).

The EU regulators in Brussels have not yet legally assessed Michelin's actions. It is difficult to say to what extent such plans to supply under-sanctioned products to Russia bypassing the formal restrictions from Brussels are legally sound. What is puzzling, however, is the fact that the leading French brand does not seem to care at all who the final recipient of its products is.

However, the problem of Turkey as a “dark territory” through which sub-sanctioned goods are delivered to Russia does not only concern French brands. For example, ARD recently published an investigation into the supply of German machine tools to the Russian Federation, which can be used in the defense industry to produce various types of weapons.

All this suggests that the transparency of business processes in Turkey is still far from European standards and it is unlikely that the country will be ready for EU accession in the near future, as President Erdogan is striving for. However, this does not relieve European companies of the responsibility of using legal loopholes to circumvent Brussels' anti-Russia sanctions without formally violating them.

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