The UK government has suspended a controversial deal that would have seen a British manufacturer export high-tech machinery to Armenia, amid mounting evidence the equipment could be diverted to bolster Russia’s military production.
Trade Minister Chris Bryant confirmed the move after a review was triggered by revelations linking the Armenian buyer, Rydena LLC, to the Kremlin’s war machine. The Cheshire-based firm Cygnet Texkimp was weeks away from shipping two machines that produce carbon fibre “prepreg”—a lightweight, high-strength material with uses ranging from sports cars to missiles and drones.
A Deal Under Scrutiny
Officials at the Department for Business and Trade initially told Cygnet Texkimp that the export did not require a special licence, issuing a ‘No Licence Required’ (NLR) decision. This signalled the government’s routine vetting had not raised immediate red flags. However, that decision is now being re-examined.
In a letter to Liam Byrne MP, the chair of the House of Commons Business and Trade Committee, Mr Bryant stated: “We are currently reviewing an earlier determination that the export was not subject to licence.” He confirmed the licence application had been reopened and that “no export has yet taken place.”
The minister indicated that, following further consultation, some elements of the production equipment should now be considered subject to dual-use controls. These regulations govern items that can be used for both civil and military purposes, designed to prevent ostensibly civilian exports from fuelling conflicts.
Cygnet Texkimp stated it had proactively engaged with authorities from the outset, voluntarily applying for an export licence because it recognised the prepreg machine could be categorised as dual-use. The company said it was told a licence was not needed, and that it “has always operated in full compliance with UK export control regulations.”
The Russian Connection
The review was prompted after a Guardian report outlined Rydena’s ties to Umatex, a Kremlin-owned company that is Russia’s largest producer of carbon fibre. Rydena was established in 2024 by former executives of Umatex, a company deemed “indispensable” for Russian weaponry including the Iranian-designed Shahed drones used to attack Ukraine.
Umatex was sanctioned by the US in February 2023 and by the UK later that year. Its chief executive, Alexander Tyunin, a key figure in supplying materials for drone production, was found dead in September 2025 in an incident reported as suicide. Experts warn that the founders’ past involvement in this critical military supply chain raises serious concerns that Cygnet’s hardware could be used to funnel carbon fibre to Russia, circumventing Western sanctions.
While Rydena has denied doing business with Russia or sanctioned entities, and both it and Cygnet insist the equipment is for civil applications, sanctions experts question the robustness of such assurances. Cygnet stated that Rydena signed a certificate of undertaking that the goods would not be used for weapons-related purposes, but the broader context casts doubt on its efficacy.
The government has declined to say whether the Export Control Joint Unit (ECJU)—the cross-departmental body that assesses licence applications—was initially aware of the Rydena executives’ Umatex backgrounds, which are publicly listed on LinkedIn.
Armenia: A Hub for Circumvention?
The case highlights wider anxieties about Russia using third countries to procure sanctioned goods. Armenia, which hosts a significant Russian military base and sits geopolitically between Turkey, Iran, and Russia, has been identified in government reports as a hub for Moscow to indirectly acquire critical military equipment.
Recent intelligence suggests Russia is strengthening its military presence in the country. UK government guidance already flags Armenia among “at-risk” third countries where Russian efforts to circumvent sanctions are a pronounced threat. Since February 2022, the UK has banned the export of all dual-use items directly to Russia.
The ECJU assesses applications against the Strategic Export Licensing Criteria, which include the risk of diversion to an undesirable end-user. Further reporting by the Guardian indicated that Cygnet had shared technical drawings with Rydena and agreed to provide manuals translated into Russian, details that may factor into the ongoing assessment.
Tightening the Controls
In a subsequent evidence session with the Business and Trade Committee, Minister Bryant said the government plans to strengthen export licensing laws to improve controls on goods being diverted to Russia. This includes planned secondary legislation to introduce sanctions end-use controls, which would cover a wider range of goods not normally subject to export controls, where risks of diversion to Russia are identified.
This case emerges amid a broader UK effort to clamp down on entities supporting Russia’s military production, with sanctions imposed on networks supplying machine tools, microelectronics, and drone components. The government acknowledges evidence that Russia is seeking restricted goods through complex, indirect supply chains.
“You can be assured that I will continue to take a close direct interest in this case,” Mr Bryant told the committee chair. For now, the shipment from a British firm with a 50-year history remains grounded, as Whitehall scrutinises whether a deal for advanced manufacturing tools could inadvertently aid Vladimir Putin’s war in Ukraine.
