The investigation was prepared together with the Belarusian Investigative Center (BIC), the non-profit organization C4ADS, the Lithuanian publication 15min.lt, and the project of the Ukrainian RFE/RL service Schemes.
“When you press your finger, and the phone knows where you pressed, <...> — this is, in part, the trace of Izovac,” — this is how the company’s deputy director, Vitaly Khomich, explained the essence of its technology invented in 2020.
Izovac is a successful Belarusian hardware business. The company was founded in 1992 by a group of scientists and started by applying a shiny coating to glasses. The earned money was enough to open a production of protective screens for computer displays. By 2020, Izovac captured 20% of the entire global market for vacuum coating equipment for the production of touch screens.
Among Izovac’s clients are the largest global brands: from Apple to Samsung. About half of the touch screens for all iPhones and iPads were initially manufactured using the company’s equipment, states a 2020 World Bank report.
Over 30 years of operation, the company has grown, its owners and employees have registered several legal entities in Belarus, in Russia, in the EU, and opened a joint venture in Taiwan.
As IStories, together with its partners in this investigation, found out, the Russian enterprise does not earn money from coating screens at all. Its revenue comes from contracts with enterprises connected to the military-industrial complex, to which the company, among other things, supplies equipment produced in the West.
Since the beginning of the war, the revenue of the Russian legal entity, Engineering Group, has grown sevenfold — from 1.8 billion rubles in 2021 to 9.7 billion rubles in 2024. The revenue of the Belarusian companies of the group has only grown two and a half times in recent years — to 2.5 billion rubles in 2023. The European legal entity I-Photonics, which belongs to the sons of the owners of the Belarusian Izovac, tripled its revenue — from 1.522 million euros in 2022 to 5 million euros in 2023.
How are supplies arranged
Until 2023, the Russian company Engineering Group was called Izovac Engineering. Its owner, Belarusian Sergey Yanovich, was an employee of Izovac from 2015 until at least 2024, according to data provided to the investigation’s authors by the Belarusian group Cyberpartisans. The Izovac Engineering website stated that the company was the official representative of the Belarusian group Izovac.
Former co-owner of the Belarusian Izovac, Evgeny Khokhlov, stated in a conversation with journalists that Engineering Group is legally an independent company, a distributor of Izovac products.
Khokhlov owned a share in the Belarusian company until November 2022. He is now a co-owner of the Lithuanian company I-Photonics, selling the same equipment in Europe as Izovac, but under its own brand. According to him, the Lithuanian company also has no ties to the Belarusian company.
In August 2024, the U.S. imposed sanctions against Engineering Group and its Hong Kong counterpart for supplying microelectronics to Russia. However, Izovac itself avoided sanctions.
How the Belarusian enterprise works together with the Russian one and supplies equipment to Russian companies can be seen in the following example.
At the end of December 2023, the Russian microelectronics manufacturer NM-Tech purchased a used chip etching machine from the American company Applied Materials from Izotek-M, a company registered in Belarus. Izotek-M is half-owned by Izovac and half-owned by the Taiwanese More Tech International Corporation.
This is not just sanctioned equipment — it is a device that is under special control as being of increased importance to Russian industry, including the military. Despite the fact that it is used, U.S. sanctions still apply to it, explained Richard Nephew, a senior research scholar at Columbia University who was the first U.S. coordinator for global anti-corruption policy at the State Department until 2024, to the authors of the investigation.
NM-Tech is mainly engaged in civilian electronics: chips for bank cards, passports, SIM cards, and the development of microchips for mobile communication systems and internal combustion engine control systems. However, in January 2024, the company registered a new type of activity for itself — the production of weapons and ammunition.
NM-Tech was included on the sanctions lists back in early 2022 for its connection to VEB.RF: the state corporation is the company’s sole shareholder. According to data from 2020 (the latest available), the company’s board of directors included former Russian Deputy Prime Minister and current Special Presidential Representative for International Cooperation in Space Yuri Borisov, as well as Deputy Head of the Ministry of Industry and Trade Vasily Shpak.
Three weeks before the chip etching machine was shipped to the Russian company, Izotek-M purchased it from Hong Kong-based Smart Kit Technology. Engineering Group was the company that imported the machine into Russia. When importing the machine from China, the Belarusians declared its value as $3.6 million, but when selling it to NM-Tech, the price increased by $600 thousand to $4.2 million.
One of the authors of this text managed to meet with a More Tech International Corporation manager named Sol Lin at their Taipei office. Posing as an interested client, he asked for help with supplying a prohibited American machine tool to Belarus — similar to the one Izotek-M supplied to NM-Tech. Lin replied that it was impossible to buy a new machine, but a certain partner in China could help purchase a used one.
The Applied Materials machine imported into Russia is just one example of sanctions-busting imports organized by the Izovac group. In total, in 2022–2024, Engineering Group imported various goods into Russia worth $72 million — mainly equipment for microchip production and optical devices. This included at least $32 million worth of prohibited Western technology, such as semiconductor production equipment from Korean NvisANA and American Lam Research, and spare parts for them.
At the same time, until May 2022, the company was not involved in import activities at all, although it was registered back in 2020.
Almost all clients are under sanctions
Over the past three years, we have found transfers to Engineering Group from Russian weapons and microelectronics manufacturers totaling almost 14.8 billion rubles (about $181 million).
More than 30 of Engineering Group’s clients are connected to the military industry. Most of them are Rostec companies, Russia’s largest arms manufacturer. Almost all of Engineering Group’s client companies are under Western sanctions. Among them are manufacturers of guidance systems for Kalibr cruise missiles, Orion attack drones, as well as onboard systems for combat aircraft and helicopters.
The main client of Engineering Group is still NM-Tech. In 2022–2024, the Russian microelectronics manufacturer paid the Russian subsidiary of Izovac 8.5 billion rubles (about $106 million).
In addition to supplying equipment, the Russian firm helped the enterprise set up the production of chips and microcircuits, training employees to work on the supplied equipment. The last invoice between the two firms, which is at the disposal of the authors of the article, was paid in July 2024.
We also discovered direct supplies of equipment to Russia from Izovac itself and its subsidiary InterNanoTechnologies. Since the beginning of the war, they have sent almost $10 million worth of goods to Russia. These are mainly the company’s own products — vacuum equipment and spare parts. Among the customers are at least 30 Russian military-industrial complex enterprises.
Requests to Engineering Group, the Belarusian Izovac, Applied Materials, and the Taiwanese More Tech International Corporation remained unanswered at the time of publication.