13 December 2019

Industrial espionage, the subject of a new conflict between Moscow and Washington

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Russian citizen Alexander Korshunov, the chief of the business development department at the United Engine Corporation branch of state conglomerate Rostec, was detained by Italian authorities in Naples on August 30, under the accusation of stealing documents which contained secret technological information from General Electric in order to use them in a program to produce engines for Russian aircrafts. In the same case, an Italian citizen, Paolo Bianchi, was charged under the suspicion of collaborating with Korshunov, after he also previously worked for General Electric. The two have been indicted by the US Department of Justice for attempting to steal commercial secrets from an American aviation company. Russia’s foreign minister and President Putin promptly reacted, accusing the United States of “hunting Russian citizens, which leads to an additional degradation and an unpredictable course of Russian-American relations”.

Image source: Mediafax


Conspiracy and theft of secrets from an American company

On August 30, 2019, a Russian citizen was arrested on the Capodichino Airport in Naples, Italy, following a red notification issued by Interpol.

The Russian citizen, Alexander Yuryevich Korshunov, aged 57, is the subject of a criminal complaint made by the US Department of Justice. American prosecutors accuse Korshunov of industrial espionage.

The charges are not only direct towards the Russian citizen, as 59-year old Paolo Bianchi is also accused of conspiracy and theft of secrets from GE Aviation, a US aviation company.

GE Aviation, a branch of General Electric, has its headquarters in Evendale, Ohio, and is among the main aircraft engine and various component providers for civilian and military aircraft. It owns a global network of services which supports its offers.

According to the Department of Justice, Alexander Korshunov was employed by the United Engine Corps (UEC), which had Aviadvigatel as a branch, an entity listed by the Department of Trade in September 2018 as having undergone activities contrary to the national security and interests of the United States. Paolo Bianchi worked in the past for the Italian branch of GE Aviation, a period in which he was responsible for business in China, Russia nad Asia, and later for the Aernova company, based in Forli, Italy.

The two companies, Aviadvigatel and Aernova, have carried out contracts together and it is presumed that, between 2013 and 2018, Bianchi – on part of Korshunov – hired workers of the Italian branch of GE Aviation for consultancy on gearboxes destined for jet engines. They used secret data in their reports and, despite the intellectual property of GE Aviation, the employees mentioned in the work statement that the owners of the patent and the intellectual property obtained following the works are … Russia’s Industry and Trade Ministries.


Who is Korshunov and who does he work for?

A graduate of the Moscow Energy Engineering Institute in Moscow, with an MBA from the University of Economy and Trade in Vienna, a former diplomat (rank III secretary of the USSR’s Foreign Ministry, Russia’s viceconsul to Istanbul between 1990-1995, rank II secretary at Russia’s Foreign Ministry until 1999), Alexander Yuryevich Korshunov is also a former development director of the JSC United Engine Corporation (ODK), a Russian state company which is part of the Rostec group.

United Engine Corporation produces engines for the civilian and military aircraft, has contributions to space programs, makes various electrical and thermal generation units. It created a new version of the PD-14 aviation engine for MS-21 commercial aircrafts, considered a priority in Russia’s state program “The Development of the Aerospace Industry 2013-2035”. The company is known for the fact that it built and introduced on the market new gas turbine models, with Rosneft, Rosatom and Roscosmos among its usual clients.

Dvigatel is the Russian word for engine. Aviadvigatel, founded in 1939, is in fact a United Engine Corporation project bureau, specialized in the development of civilian and military aircraft engines, including the PD-14.

It seems that the PD-14 would be at the centre of the presumed espionage activity, with the Russian citizen accused of illegally gaining the possession of General Electric documents, in order to reuse them for the Russian program necessary to develop an engine for the new MS-21 civilian aircraft.

PD-14, considered a vital program for Moscow, is constantly being postponed due to international sanctions (Carlo Bonini, Repubblica).

After he presumably arrived in Naples directly from Moscow or following a trek through several European countries, Korshunov was placed under maximum surveillance and the Poggioreale prison, at least for some time, while the extradition request is expected.

Alexander Korshunov, whose case drew the attention of Italian General Prsoecutor Luigi Riellor (Il Messaggero), was the subject of a red notification issued by Interpol.

The red notification is a request to localize a person who is set to be extradited and place them under protective custody, issued at the request of an Interpol member state or an international court based on an arrest warrant.

This was not the case of an international arrest warrant, and each country decides on the legal value granted by a red notification. For the moment, Alexander Korshunov is, according to the criminal complaint, only the subject of some charges, and is considered innocent until his guilt is proved in a court.


The Russian authorities’ immediate reactions

After the Russian citizen was detained, Interfax noted that Russian diplomats requested the US Department of State to renounce the extradition request, claiming that it is inadmissible to “hunt Russian citizens worldwide, which contravenes international laws and leads to an additional degradation and an unpredictable course of Russian-American relations”.

The Russian publication Vedomosti, quoting Rostec’s media service, claims that the situation will be resolved via diplomatic channels, and that Korshunov was not involved in any illegal activity.

Russia’s Foreign Ministry stated that Korshunov’s US-requested detention is a “manifestation of disloyal competition”, which is also the opinion of the Russian president.

For Vladimir Putin, United Engine Corporation did nothing else but build a new engine, the first high-tech Russian product in 28 years, for which a contract was signed with an Italian consultancy company, which is a “natural practice around the world, a commercial endeavour with European partners”.

“We do not have to steal anything: we built everything with our own hands and minds, with the minds of our own specialist. Consultancy, common endeavours for modern high-tech products are absolutely natural and open public practise. The detainment of Russian citizens at the request of the United States is interfering with bilateral relations,” considers the Kremlin leader.


Who employed Paolo Bianchi?

The mass media brought the Russian citizen’s case and his arrest to the limelight. But what is known about Paolo Bianchi, his partner in the presumed espionage affair? Nothing. And yet…

In the Department of Justice statement, there is a short specification regarding the fact that the Italian citizen worked for a … company in Forli: Aernova.

In 1986, Giancarlo Giunchi, with a technical diploma and various master’s degree, established the Aernova Srl company, situated within the Forli international airport, which benefitted from its own aircrafts, a hangar, offices and provided several types of aerial services for the environment, civil protection etc.

In 2003, the same Giunchi established Dieseljet Srl in Forli, which was destined for the design, construction and certification of advanced diesel engines for flight appliances, which was apparently the first European company in the field of flight engines to grant a construction licence to a US company. In 2004, Giunchi also took over the “historical” Aeronautica Srl Bologna company, established in 1946, which operated in the fields of installation engineering and avionics.

The Twitter profile belonging to Giancarlo Giunchi sends us to the aernova.it website, where the Aernova Aerospace Industries S.p.A company, founded in … 1986, which claims that it is a worldwide piston engine manufacturer and advanced aeronautic energy tech provider, based in Forli and with production bases and research centres both in Forli, as well as in… the Binhai district in Weifang, China. The company offers integrated solutions for apps destined for aircraft engines, technological development and aeronautic services.”

It is also mentioned, among others that Aernova was certified by the European Aviation Safety Agency (EASA) and that it has “in-depth” collaborations with GM Atomic Energy, Fiat Power Research, Italia International Research Center and the University of Bologna in the field of modernizing technology.

And a significant fact: in 2017, Aernova co-founded Aernova Aerospace Products SPA, seeking to integrate several aviation companies in order to request an international listing, while in June 2018 Aernova established Aernova Aero engine Co. Ltd. in the district of Binhai, Weifang, China.

Coincidence or not, the last posts on the Giancarlo Giunchi Twitter account, as well as news on the aernova.it website were made in 2018, sometime in July.

Whose employe was Paolo Bianchi? According to the US Department of Justice … of the Aernova company in Forli.

And US prosecutors also accused him of stealing secrets from GE Aviation, together with Korshunov.

The same company from where Chinese citizen Yanjun Xu attempted to steal sensible information, also according to the Department of Justice, in October 2018.


About everything else, as is sometimes mentioned before a movie, any resemblance to real individuals or acts is entirely accidental.

Translated by Ionut Preda