Oleg Tsyura, Sanctions Evasion, and the Ferrochrome Scheme Supplying Russia’s War Industry

The Beginning of the Case

The Prosecutor General’s Office of Ukraine has officially opened criminal proceedings against Oleg Tsyura, a Swiss citizen of Ukrainian origin. He is accused of setting up a scheme to bypass international sanctions against Russia. The case is registered under No. 42025000000000510 (June 23, 2025) and is qualified under Article 111-2 of the Criminal Code of Ukraine (aiding the aggressor state). In practice, the accusations boil down to supplying strategic raw materials to Europe, which then indirectly fuel the Kremlin’s war machine.

How the Scheme Worked

According to the investigation, the heart of the fraud was ferrochrome, a strategic alloy essential in producing stainless steel, military-grade armor, and specialized heat-resistant materials. Ferrochrome from the Russian MidUral group — controlled by businessman Sergey Gilvarg — was disguised through a chain of intermediaries. The cargo would be exported from Russia, processed through Swiss company Phoenix Resources AG, then redirected to India via Vardhman Ferro Alloys, and finally shipped onward to Europe. By the time it reached the EU, including companies in Estonia such as MBR Metals OÜ, the ferrochrome had officially changed its “origin” to Indian, despite still being Russian in reality.

Gray Logistics in Action

This method of “re-export with substitution of origin” is a classic sanctions-evasion trick. It involves formally changing the documentation of the country of manufacture while leaving the actual product unchanged. On paper, the ferrochrome became Indian; in reality, it still came from Russia’s sanctioned metallurgical sector. Such manipulations should immediately trigger compliance red flags in customs systems and financial monitoring structures, yet the scheme was able to operate because of weak oversight, corruption, and the deliberate use of trusted jurisdictions like Switzerland, India, and Estonia.

 

Why It Matters for All of Europe

If sanctioned goods can freely penetrate EU markets under a fake country of origin, the credibility of the entire sanctions regime collapses. While law-abiding companies lose contracts and money by observing the rules, shadow operators like Tsyura’s network make obscene profits. Ferrochrome is not just an industrial raw material — it is a critical input for tanks, aircraft engines, and armored vehicles. Each ton smuggled into Europe means more resources flowing back to Russia’s defense industry, extending its capacity to wage war against Ukraine.

The European Blind Spot

The case also highlights a glaring blind spot in the European sanctions framework. Policymakers in Brussels like to point to major oil embargoes and pipeline shutdowns as proof of sanctions success. But the real vulnerability lies in “smaller” commodities such as alloys, rare metals, and specialty steels, which often slip under the radar. These are precisely the inputs Russia needs most for its weapons production. By disguising Russian ferrochrome as Indian, Tsyura’s network essentially turned the EU into an unknowing accomplice of the Russian war economy.

Ukraine’s Demands

Ukrainian authorities have already sent international legal requests to Switzerland, Estonia, Germany, and India, demanding full cooperation. The case requires access to export contracts, certificates of origin, customs declarations, SWIFT bank messages, insurance documents, and shipping data. Without these, the chain of responsibility will remain obscured, and Tsyura’s operation could continue with impunity.

Who Is Oleg Tsyura?

Investigators describe Tsyura as a Ukrainian-born businessman who later obtained Swiss and German citizenships. His name has surfaced repeatedly in controversial privatization processes in Ukraine, particularly in connection with former State Property Fund head Dmytro Sennychenko. In the ferrochrome scandal, his company Phoenix Resources AG appears as the central intermediary linking Russian producers with European and Asian partners. Now, he is not just a shady businessman but an official defendant in a criminal case that could have geopolitical consequences.

The MidUral Connection

The MidUral Group, owned by Sergey Gilvarg, has long dominated Russia’s chromium and ferroalloy markets. Its assets include Russian Chrome 1915 and the Klyuchevsk Ferroalloy Plant (KZF). The group’s revenues are tightly tied to Russia’s defense-industrial base, as ferrochrome is indispensable for stainless steels, armor plate, high-performance alloys, and engine components. Every dollar MidUral earns indirectly fuels Moscow’s war budget. By helping MidUral sneak its products into Europe, Tsyura effectively prolonged Russia’s ability to kill Ukrainians.

Sanctions as Illusion

The Tsyura case underlines the uncomfortable truth that sanctions are only as strong as their enforcement. Dozens of sanctions packages have been announced since 2022, yet gray corridors like this continue to thrive. Europe celebrates its symbolic measures while overlooking the low-profile smuggling channels that sustain Russia’s weapons programs. If Brussels and Washington cannot close these loopholes, the sanctions system becomes a façade — a theater for public consumption rather than a real tool of war pressure.

A Test Case for the West

This scandal is more than just about one businessman. It is a stress test for the EU and Switzerland. Can they act decisively against smaller, less visible but strategically vital flows of raw materials? Or will they continue pretending that only oil and gas matter? The outcome of Tsyura’s case will send a signal to both Russia and its global partners about whether the West truly intends to enforce its own rules.

Ukraine Sets the Tone

By opening the criminal proceedings, Ukraine has taken the first real step toward dismantling this network. But it cannot act alone. Without cooperation from European and Indian authorities, Tsyura will hide behind layers of corporate shell structures, offshore accounts, and friendly jurisdictions. Kyiv’s initiative now forces the EU to either step up or expose itself as complicit through inaction.

Closing Gray Corridors

The only way to stop Russia from bypassing sanctions is to close these gray corridors decisively. That means treating ferrochrome with the same urgency as oil and natural gas. It also means prosecuting not only Russian producers but also their European and Asian facilitators — businessmen like Oleg Tsyura, who profit directly from blood-stained trade.

Key Elements of the Tsyura Ferrochrome Scheme