"Layka Camera Rush"
On March 16, 2022 the profile edition of Macfilos with reference to the press release of Leica Camera AG announced that the company turns off activity in Russia and will soon close the only company store in the country. The departure of the company was written by many resources that track the position of international companies after the start of a full-scale invasion – for example, the Yale School of Management . But the actual actions of the company diverge from the press release.
Leika is one of the niche manufacturers of luxury cameras and optics, but in addition to cameras, the company produces scopes, binoculars and glasses under the Mykita brand. The company's turnover in the 2021/22 financial year increased by 16% and amounted to €450 million. In Russia, Leica Camera has its own branch – Leica Camera Russia LLC, and a company store in GUM.
According to the Unified State Register of Legal Entities, instead of the termination of work in Russia announced by the German company, on April 6, 2023, Lake Camera Russia LLC only changed its name to Vechernyaya Zvezda LLC. The founders of the company, however, remained the same. 99% of the Russian company is owned by Leica Camera Austria GmbH, and another 1% by AHK Vermögensverwaltung GmbH. The head of the company is a German citizen Klaus Hauer, who previously worked in the Russian representative office of Volkswagen.
Austrian neutrality and night vision scopes
Along with Hungary and Switzerland, Austria remains one of the few countries in Europe that has refused military assistance to Ukraine. So, on January 30, 2023, Austrian Defense Minister Claudia Tanner announced that her country would not provide Ukraine with defense assistance "to prevent further escalation." Unlike the Minister of Defense, Austrian businessmen are not afraid of escalation. The neutrality of Austrian politicians did not affect the position of Leika's Austrian management. When the Russian branch imported red dot sights and laser rangefinder binoculars from Leiki's German factory, the Austrian leadership at least did not interfere with these transactions.
Leica's Russian branch was supposed to be the German quality ambassador for optics in Russia – or so the corporate statements said. But after the outbreak of the war, the company seemed to change its specialization from ultra-expensive cameras to dual-use goods. If in 2020 and 2021 Lake Camera Russia received only one declaration for binoculars with rangefinders, in 2022 everything happened exactly the opposite: the company issued only one declaration for the import of cameras, and three for night vision devices.
Already after the start of a full-scale invasion, and after the crimes of the Russian army in Bucha became known to the press, Lake Camera Russia issued three declarations for the import of binoculars and sights at once: on July 6 , November 18 , and December 15, 2022. Such declarations are received for customs clearance of the first batch of goods. Subsequent deliveries are usually issued on the existing declaration to save money. For example, the declaration for binoculars with a laser rangefinder EAEU N RU D-DE.RA04.V.66670/22 dated 07/06/2022 has a validity period of five years, and goods can be imported under it until July 2027.
The company began supplying binoculars and scopes shortly after the Russian invasion of Ukraine.
In addition to supplies for its own branch, Leica Camera also cooperated with other Russian clients. According to customs data aggregator ImportGenius , until December 2019, the German Leica Camera AG supplied optical equipment to the Kovrov Mechanical Plant, which produces gas centrifuges for uranium enrichment. Another client of the company was the Krasnogorsk plant named after S. A. Zverev. This enterprise produces Zenit-M cameras developed on the basis of the German Leica M typ 240 camera. In addition to amateur cameras, the Krasnogorsk plant manufactures military optics, from aerospace photographic equipment to fire control systems for Mi-35 helicopters. The last delivery to the Krasnogorsk plant is dated December 2021. At the same time, Leica did not violate the sanctions: the European Union banned the export of binoculars and night vision scopes to Russia only a year after the start of the war, on February 25, 2023.
The financial statements of Lake Camera Russia <available to The Insider> raise a number of questions that an experienced auditor or tax inspector would help answer. For the second year in a row, the company spends more on commercial operations and its own management than it receives from sales. In 2022, with selling expenses of 73.5 million rubles and management expenses of 30.2 million rubles, sales revenue amounted to only 79 million. Such a cost structure is typical for entering an emerging market, and rather atypical when working in a country waging an aggressive war . Leika's losses in Russia increased from 10.3 million rubles in 2021 to 29.3 million rubles in 2022.
It is possible that the corporate decision to break the public promise and continue the unprofitable business was influenced by the head of the Russian branch. In addition to managing Lake Camera Russia, Klaus Hauer runs a personal business associated with it. Mr. Hauer is the CEO and sole founder of Rays LLC on Volzhsky Prospekt, a small shop selling photographic equipment.
Swiss rangefinders through Chinese resellers
Like Austria, Switzerland has declared its neutral position in the Russian-Ukrainian war. But despite official neutrality, Swiss equipment, including laser rangefinders and tachometers, end up in Russia. These geodetic instruments are used to measure distances and angles to distant objects, and can be used to correct artillery fire. For example, the Leica TS07 R500 total station, when using a reflector, can survey areas at a distance of up to 10 km.
Geodetic equipment Leica is produced by the Swiss company Leica Geosystems AG. In Russia, this company operated through its subsidiary Hexagon Geosystems Rus LLC. Hexagon is 95% owned by the Swiss Leica Geosystems AG, and 5% by the Dutch Leica Geosystems Holdings BV. Unlike the German Leica Camera, the Swiss company did not make loud statements, simply curtailing the Russian business after the start of the war. The last import declarations were issued in March 2022, and at the end of 2022 the company's inventory was estimated at 4 thousand rubles – a year earlier they amounted to 563.88 million rubles.
The supplied devices can be used to correct artillery fire.
At the same time, a number of companies remained in Russia that call themselves official dealers of Leica geodetic instruments: Geooptic , Geospectr , Rusgeokom , Profpribor and TsPI . Many of their websites indicate that the equipment is in stock. In total, from May 2022 to April 2023, Russian importers filed 24 declarations for Leica Geosystems AG products, importing them through Chinese and Turkish intermediaries. A number of these companies previously acted as a supplier to the Ministry of Defense and law enforcement agencies.
For example, the catalog on the RusgeoCom store website lists 16 Leica total stations, 5 of which are in stock. In August 2022, this firm purchased Leica Geosystems AG equipment through Chinese intermediary Shanghai Merrypal Import Export Co., according to customs records . Ltd. RusGeoCom is a major supplier to law enforcement agencies and the Ministry of Defense. The company has signed more than 114 state contracts for 280.524 million rubles, three of which were concluded with the Ministry of Defense for the supply of geodetic instruments (contract dated August 7, 2017 for 699,422 rubles, contract dated July 19, 2017 for 9.092 million rubles, contract dated July 17, 2017 for 64 .9 million rubles).
A client of the Chinese importer Shanghai Merrypal is also the Khabarovsk-based Geotechnologies LLC . Although information about the brand and manufacturer has been removed from the customs data, Leica geodetic devices are listed in the catalog on the company's website. Of the 83 government contracts in which Geotechnologies participated, a part falls on law enforcement agencies, for example, the Armaments Department of the FSO .
Another Leica Geosystems importer, Rusgeotorg LLC, purchases equipment through the Israeli company GMX System Ltd. Owner Rusgeotorg is Egor Vladimirovich Vyalkov, who in the past was the founder of LLC GCM Company. This company signed 45 state contracts for 30.05 million rubles with law enforcement agencies, including the supply for the Main Military Construction Directorate No. 9.
