• Our study first established a baseline understanding of Interlab's trade activity prior to entity listing, based on a search in trade data for the Tikhvinsky address listed by the Department of Commerce. This search failed to reveal any transactions for this address, however, did reveal numerous imports to an Interlab at a different Moscow location. We assume this company is related due to the similar name and purchasing patterns, and the fact that it appears to have ceased its import activity shortly before the March 2021 entity listing. We used these results to provide context to subsequent transactions.
   
• The study then identified four potential Interlab affiliates operating in Russia since March 2021, including two facilities in Moscow, one in Khabarovsk, and one in St. Petersburg. One of the Moscow locations both imported and exported chromatograph components from Chinese and Montenegrin companies, while the other received technology directly from the United States and European Union, with purchases including laboratory equipment used in the dairy industry and specialty growth media used to assess contamination. Additionally, numerous shipments of chromatography and spectrometry equipment were observed flowing from Chinese companies to the facility in Khabarovsk. Finally, the St. Petersburg location engaged in both import and exports of large volumes of miscellaneous raw and rare earth materials, and further analysis is necessary to determine its relationship—if any—with the laboratory equipment importers.
   
• Finally, our study determined that additional suppliers to Russia using the name Interlab had been operating in Germany, Georgia, Greece, Italy, and Thailand since March 2021. The Turkish Interlab facility appeared the most active, supplying laboratory equipment, glassware, and consumables to several Russian customers, with shipments beginning in 2018 and peaking in 2022. The Italian facility provided regent kits and analyzer parts to a single Russian customer, while the facilities in Georgia and Greece were almost exclusively recipients of exports of unspecified diagnostic kits. Finally, the Thailand-based location provided several tons of cosmetic products to a single individual in Russia. The nature and extent of these companies' relationships with the entity-listed Interlab remain an information gap.

Discussion of Procured Technology

This study indicates Russia employs trading partners in countries outside of Western Europe and the United States to maintain a supply of laboratory technology despite a tightening regulatory environment. At least two of the Chinese companies appeared to be established for the sole purpose of helping Interlab circumvent Western regulations—both were founded in 2021, and in one case, the Interlab office in the Far East was the company's only identified customer. Additionally, the equipment procured by the companies in this study primarily consisted of laboratory supplies and consumables, versus more sophisticated laboratory instrumentation manufactured primarily by companies in the United States and Europe. We assess this is likely due to limitations on available data—which was largely obtained from ocean freight records—and therefore Russian equipment importers may rely on air freight for these more sensitive and expensive shipments. Obtaining air frieght data could likely validate this assessment and help identify purchasing routes for more sensitive laboratory instrumentation. 

Based upon these results, we judge that identification of companies like these and awareness of new business practices can inform US technology manufacturers' due diligence process. This will make it easier to identify red flags—such as recent incorporation or similar names to sanctioned companies—and mitigate the risks associated with these potential transactions. Contact us for the full report and insight on incorporating these findings into your company's due diligence process.