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Russian spies are aggressively seeking Western technology as sanctions bite, officials say

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Russian spies are aggressively seeking Western technology as sanctions bite, officials say
News

News

Russian spies are aggressively seeking Western technology as sanctions bite, officials say

2026-05-30 12:01 Last Updated At:15:20

STOCKHOLM, Sweden (AP) — Russia's intelligence agencies have grown more aggressive in their efforts to steal Western technology and defense secrets as sanctions squeeze the country's wartime economy, three senior European intelligence officials told The Associated Press.

Moscow's agents are building fake companies, recruiting middlemen and deploying cyber spies and hackers who are gathering information that could also be used to attack key infrastructure, they said.

Four years of international sanctions have hampered Moscow's ability to procure machinery, technology and research from Europe, while the grinding war in Ukraine has taxed key industries and pushed the country toward a potential financial crisis.

“They really know what they need,” and are putting “serious effort” into acquiring advanced machine tools, factory equipment, research and dual-use technology, said Christoffer Wedelin, deputy head of operations at the Swedish Security Service.

In Sweden, Russia is targeting the defense industry and high-end research on the country's most advanced weaponry, such as the Gripen fighter jet, Wedelin said. It is also trying to procure camera and laser technology developed for civilian purposes that could be integrated into Russian weapons systems, he said.

Moscow is also trying to steal technology to help it keep pace — or give it an edge — against the West in the decades ahead, said Juha Martelius, the director of Finland’s Security and Intelligence Service.

“We're talking about space technology, quantum ... arctic technology, marine technology,” he said, adding that space technology is something Russia needs “right now," without elaborating. Countries use such technology for satellite imaging, communications and navigation.

Russia also needs sanctioned computer technology and software updates for machine tools, Martelius said.

On Wednesday, Anne Keast-Butler, the director of the U.K’s signals intelligence agency, accused Russia of “relentlessly targeting” the U.K. and its European allies, by stealing technology and plotting sabotage and assassination attempts.

In May, Swedish police arrested two people on suspicion of violating sanctions relating to a company in Turkey that has made dozens of shipments of metalworking and metal-turning machine tools to Russia.

As the schemes to acquire technology grow more complex, companies need to be more aware they could unwittingly become part of Russia's war supply chain, Wedelin said.

“All of the security and intelligence services in Russia are helping out on the state’s efforts to get this," he said.

Moscow is also deploying cyberattacks against European firms and critical infrastructure in an attempt to gather information, which it could exploit “when they get the chance and when it serves their purpose,” Wedelin said. He pointed to an attack on a Swedish power plant last year.

Russia-linked actors tried to “destroy” the plant but failed because the system detected the intrusion, Wedelin said. He said the attack was partly aimed at undermining Western support for Ukraine.

Before then, Sweden's security services had mostly observed reconnaissance for potential attacks, intelligence gathering or activity linked to cybercriminals. The attack marked a “switch” in Russia's modus operandi, Wedelin said.

“They’re no longer caring as much about potential attribution after their activities, so they are taking greater risks to achieve their goals,” he said.

Russia's increasingly aggressive tactics may reflect mounting internal concerns about its economy, which “is not doing well at all,” said Kaupo Rosin, the head of Estonia’s Foreign Intelligence Service.

About a third of Russia's gross domestic product currently goes to the war effort, Martelius said. The war and ensuing sanctions have slowed growth and fueled stubborn inflation.

Russian officials planned to have a budget deficit of 3.7 trillion rubles ($52.1 billion) for the whole of 2026 and had already reached about 3.4 trillion rubles ($47.9 billion) by the end of February, Rosin said.

The Iran war that erupted on Feb. 28 has provided a boost by causing oil prices to soar. The U.S. has granted sanctions waivers for the sale of Russian oil and the U.K. watered down its sanctions in an attempt to lower global fuel costs.

Increased revenue since then has likely improved Russia’s budget, but “it doesn’t save them,” Rosin said, adding that if Western pressure persists, Moscow could face a financial crisis toward the end of the year.

Rosin said intelligence seen by his agency shows a gloomier outlook among Russian officials over the past six months, with the narrative of “total victory” in Ukraine having vanished. Keast-Butler, of British intelligence, said almost 500,000 Russian soldiers have been killed in Ukraine since the full-scale invasion in 2022.

Russia and Ukraine have mostly kept their combat casualty figures under wraps.

Stalled progress on the battlefield and economic woes have many Russian officials privately asking “what is this all for,” Rosin said, citing the intelligence reports.

Martelius, of Finland's intelligence service, said that while some reports on the war in Ukraine may have been “sanitized” before reaching President Vladimir Putin's desk, he believes the Russian leader has a fairly clear picture of the economic challenges.

But that does not mean there will be political change.

It is “very dangerous ... to start analyzing Russia as if it is some country like ours," Martelius said. “It is not.”

Ukrainian servicemen of the Cerberus Ground Unmanned Systems Company of the 60th Separate Mechanized Brigade, Third Army Corps, conduct a drill with a combat ground drone during a training at the polygon in Kharkiv region, Ukraine, Sunday, May 24, 2026. (AP Photo/Andrii Marienko)

Ukrainian servicemen of the Cerberus Ground Unmanned Systems Company of the 60th Separate Mechanized Brigade, Third Army Corps, conduct a drill with a combat ground drone during a training at the polygon in Kharkiv region, Ukraine, Sunday, May 24, 2026. (AP Photo/Andrii Marienko)

Director of GCHQ (Government Communications Headquarters), Anne Keast-Butler, delivers her inaugural annual lecture in Bletchley, England, Wednesday, May 27, 2026. (Jacob King/PA via AP, Pool)

Director of GCHQ (Government Communications Headquarters), Anne Keast-Butler, delivers her inaugural annual lecture in Bletchley, England, Wednesday, May 27, 2026. (Jacob King/PA via AP, Pool)

FILE - Russian President Vladimir Putin, right, attends a meeting with senior military officers as Russian Defense Minister Andrei Belousov, fourth left, sits near at the Kremlin in Moscow, Russia, Dec. 29, 2025. (Mikhail Metzel/Sputnik, Kremlin Pool Photo via AP, File)

FILE - Russian President Vladimir Putin, right, attends a meeting with senior military officers as Russian Defense Minister Andrei Belousov, fourth left, sits near at the Kremlin in Moscow, Russia, Dec. 29, 2025. (Mikhail Metzel/Sputnik, Kremlin Pool Photo via AP, File)

The average long-term U.S. mortgage rate climbed this week to its highest level in nearly a year, driving up borrowing costs for prospective homebuyers.

The benchmark 30-year fixed rate mortgage rate rose to 6.55% from 6.49% last week, mortgage buyer Freddie Mac said Thursday. One year ago, the average rate was 6.75%.

Higher mortgage rates can add hundreds of dollars a month in costs for borrowers, limiting homebuyers’ purchasing power at a time when affordability challenges continue to sideline many aspiring homeowners.

Mortgage rates are influenced by several factors, from the Federal Reserve’s interest rate policy decisions to bond market investors’ expectations for the economy and inflation. They generally follow the trajectory of the 10-year Treasury yield, which lenders use as a guide to pricing home loans.

Rates have been mostly rising this year as the war with Iran has driven crude oil prices sharply higher, stoking expectations of hotter inflation. That's pushed up long-term bond yields relative to where they were before the conflict began in late February, causing mortgage rates to trend higher.

The 10-year Treasury yield was 4.57% at midday Thursday on the bond market, up from 4.54% a week ago. It was just 3.97% in late February, before the war broke out.

The average rate on a 30-year mortgage is now the highest it's been since Aug. 28, when it was at 6.56%. As recently as late February, the average rate dropped slightly below 6% for the first time since late 2022.

Borrowing costs on 15-year fixed-rate mortgages, often sought by borrowers refinancing a home loan, also rose this week. That average rate increased to 5.93% from 5.82% last week. A year ago, it was at 5.92%, Freddie Mac said.

A report this week showing prices paid by consumers for gas, clothes and other goods cooled last month could help take pressure off the Federal Reserve, which is considering raising interest rates.

The central bank doesn’t set mortgage rates, but its decisions to raise or lower its short-term rate are watched closely by bond investors and can ultimately affect the yield on 10-year Treasurys.

That cooler inflation reading “is a step in the right direction, but until mortgage rates actually follow suit, buyers will keep feeling the pinch of stubbornly high borrowing costs even as other conditions improve,” said Hannah Jones, senior economist at Realtor.com.

While average long-term mortgage rates remain lower than they were at this time last year, their upward trajectory has weighed on home sales this year.

And the latest monthly tally of home purchase transactions that have yet to be finalized points to potentially more sluggish home sales this summer.

Pending U.S. home sales fell 5.4% in June from the previous months and were down 0.3% from June last year, the National Association of Realtors said Thursday. There’s usually a month or two lag between a contract signing and when the sale is finalized, which makes pending home sales a near-term bellwether for the housing market.

Data on mortgage applications also signal that the upward trend in mortgage rates has given some would-be homebuyers reason to pause.

Mortgage applications, which include loans to buy a home or refinance an existing mortgage, fell 2.7% last week from the previous week, according to the Mortgage Bankers Association. The pullback was driven mainly by a 7% drop in applications to buy a home.

FILE - A sign is posted for a new home for sale in Ambler, Pa., Oct. 16, 2025. (AP Photo/Matt Rourke, File)

FILE - A sign is posted for a new home for sale in Ambler, Pa., Oct. 16, 2025. (AP Photo/Matt Rourke, File)

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