Russia and Iran still importing Shahed drone components from China despite sanctions - WSJ

Conflict Armament Research, a U.K.-based organization that investigates illegal arms trafficking, has documented a “discernible increase” in the use of components produced by Chinese manufacturers in Shahed-type drones. Ukrainian military officials have also reported a large number of Chinese components in Russian drones.

Chinese customs data suggested that domestic companies are shipping hundreds of containers filled with dual-use goods – items that can be used to produce weapons – to Russia and Iran. The cargo on packing lists range from engines to computer chips, fiber-optic cables, and gyroscopes.

Chinese exporters earlier intentionally mislabeled some shipments to skirt U.S. and European sanctions, but in many instances they no longer bother, according to WSJ sources.

Chinese exports for fiber-optic cables spiked in the fall of 2024, shortly after Russia successfully used fiber-optic drones to counter Ukrainian defense forces in Kursk, according to the report. These exports rose even more sharply in April 2025 after Ukrainian forces knocked out Russia’s main domestic supplier of fiber-optic cables in Saransk.

Official customs data showed that Moscow also increased its import of Chinese lithium-ion batteries for UAVs.

Similar spikes in battery and fiber-optic cable exports to Iran appeared in July and August last year, immediately after Iran’s 12-day war with Israel, the WSJ wrote.

China has long served as a hub for shipping American and European-made components that could then be diverted to drone factories in Iran and Russia.

A U.S. Treasury Department investigation found that virtually all American and European components were diverted through authorized distributors to retailers in mainland China or Hong Kong, which would then ship the parts to Iran or Russia.

Payment was typically made via shell companies that are easy to set up in Hong Kong and help obscure the ultimate destinations of these components.

The Chinese turned a blind eye to that flow even as its role has been repeatedly exposed in public reporting and sanctions designations,” said Miad Maleki, a former U.S. Treasury official who oversaw sanctions programs.

“They either don’t care or have chosen not to interfere.”

Much of the recent trade in dual-use goods to Iran and Russia is driven by small Chinese companies that see an opportunity to capitalize on war-driven demand. These firms rarely deal in dollars and therefore have little to fear from U.S. sanctions, the WSJ wrote.

One such company, Victory Technology, launched a website in late January, when the U.S. started building up military assets in the Middle East to confront Iran. They are openly selling UAV engines, claiming the goods are intended for domestic civilian use.

The U.S. can’t fully stop the trade so its aim is to raise costs for Iran and Russia as much as possible, as of current and former U.S. officials. Forcing them to rely on lower-quality Chinese parts is part of that effort, the WSJ article stated.