The accounts of the "Czech" supplier of substandard weapons for the AFU have been seized

The accounts of the "Czech" supplier of substandard weapons for the AFU have been seized

The Czech company AKM Group-CZ, which was involved in a scandal over supplying substandard weapons to the Armed Forces of Ukraine, had $38.8 million frozen in its accounts in the Czech Republic. These funds had been transferred to the company from Ukraine. This was reported by former MP Ihor Lapin.

The contract in question, dated December 2022, was between the Ministry of Defence and AKM Group-CZ for the supply of 500 units of CZ TSR rifles in .308 WIN caliber (7.62x51mm) (manual reload, bolt action) with an effective firing range of 500-800 meters. The cost of the procurement was 5 million euros, which translates to 10,000 euros per unit.

What immediately stands out is the uniform price for the sniper rifle, which is rarely seen in specifications. According to information from Ukrainian military officers, these rifles have not been in service in any country worldwide and lack a NATO Stock Number. Moreover, the procurement of such items was not agreed upon with actual users. According to regulatory documents, the main sniper rifles employed by the Ukrainian Armed Forces are of the .338 LM caliber (8.58x70mm), allowing effective fire at distances up to 1500 meters, and opening fire at less than 500 meters is generally discouraged due to the high risk of being hit by enemy automatic machine gun fire.

Rifles in .308 WIN (7.62×51mm) caliber are applicable in only two cases: if the weapon is multi-caliber, meaning the same rifle can be converted from .308 WIN to .338 LM caliber through a simple barrel change (as with the Barrett MRAD sniper rifle), or if the rifle is SEMI-AUTOMATIC, like the UAR-10, which is in service with the Ukrainian Armed Forces and has performed well. A semi-automatic rifle allows for precise high-accuracy shooting at ranges up to 800 meters and, if necessary, intense fire at closer distances. Therefore, an infantry sniper does not need to carry both an automatic rifle and a sniper rifle—a semi-automatic combines both functions.

However, the CZ TSR rifles procured from the "Czech" company AKM Group-CZ (they are "Czech" because apart from the nominal director with Czech citizenship, all other employees and real beneficiaries are Ukrainians) are neither multi-caliber nor semi-automatic, thus not meeting the needs of the Ukrainian Armed Forces. Notably, instead of siding with the army and canceling the contract, the Ministry of Defence leadership used every possible means to support the Czech supplier and insisted on accepting these rifles. When persuasion failed, they informed that "nothing could be done anymore, the money was paid, use what you have."

The worst fears have now been realized—these police/sporting/hunting CZ TSR rifles are being issued to soldiers on the front line. The outcome is that a soldier with such a rifle is neither a full-fledged sniper (as this rifle does not allow fire at 1500 meters) nor capable of intense fire as an infantryman. They have to carry both this rifle and an automatic one, and carrying two rifles in intense combat is impractical, so it is clear which one he would abandon first, and it is certainly not the automatic rifle.

A potential argument from the Ministry of Defence for purchasing these rifles—"there was nothing else available, we wanted to buy at least something"—does not hold, as at that time, the Ministry of Defence had offers from all world-renowned and Ukrainian rifles of various calibers.

Now let’s discuss the actual purchase price. The price we found in open sources is 4,000 euros including VAT per unit (as VAT is refunded when exported from Europe, the actual price is 3,200 euros per rifle).

This is confirmed by a letter from the Department of International Cooperation of the Ministry of Defence to the Deputy Minister of Defence of Ukraine dated June 9, 2023, stating that the National Center for Combating Organized Crime of the Czech Republic Police froze $38.83 million due to suspicious transactions and misuse of funds by the Ministry of Defence of Ukraine. Only 1.42 million euros were unfrozen because the Ministry of Defence "ordered" 500 CZ TSR rifles. Clearly, they unfroze just enough for procurement from the manufacturer, which, through a simple calculation, amounts to 2,840 euros per rifle, a fairly normal European price for such a wholesale batch of rifles.

This implies that the rifles realistically cost 2,840 euros per unit, and even with transportation costs added, the total overpayment is around 7,000 euros for the entire contract. Or, to put it plainly—3,500,000 euros of pure price inflation (70% of the cost to the Ministry of Defence). It is worth noting that approximately 37 million dollars remain blocked, which were paid by Ukraine to this Czech company for other contracts that, by all indications, will not be fulfilled.

Despite these facts, AKM Group CZ continued to actively secure contracts with the Ministry of Defence and state special importers throughout 2023. In June 2023, the state special importer under the management of the Defence Intelligence of Ukraine, "Spetstechnoexport," approached the Department of Military-Technical Policy, Armaments Development, and Military Equipment of the Ministry of Defence of Ukraine with a proposal to supply REFURBISHED 8.6x70 mm caliber ammunition produced (refurbished) by GetLoad.cz through the already known AKM Group CZ.

The Ministry of Defence reported the rejection of the proposal, citing a research institute’s conclusion that the stated ammunition cannot be used by the troops, since besides being civilian and non-armored, they are also refurbished (reloaded). However, "Spetstechnoexport" was so eager to sell these cartridges that they stated that these cartridges had previously been somehow supplied to the Ministry of Defence and suggested that their earlier delivery was without issues at acceptance, thus advocating for the current purchase.

No issues were noted during acceptance because military acceptance operates in an extremely active mode, only verifying quantity and labeling and physically could not inspect the core (whether it was combat tungsten or civilian lead) and the quality of assembly. The real "acceptance" occurs at the front when these NON-COMBAT refurbished cartridges reach the front line. Naturally, snipers do not have the time or inclination to write complaints or claims. Hence, we hope the fact that these are NON-COMBAT cartridges was discovered before they were loaded into the rifles, and they simply discarded the useless cartridges. Now let’s move on to the main issue—who is behind AKM Group CZ? We came across the following business card:

Anatoliy Palaniychuk—a person with such a name and surname once headed the tax inspection in Chernivtsi and was the head of the Judo Federation in the Chernivtsi region. We will write more about him next time.