Russia getting around sanctions on computer chips
Russia looks to be successfully working around European Union and Group of Seven sanctions to secure crucial semiconductors and other technologies for its war in Ukraine, according to a senior European diplomat.
Russian imports in general have largely returned to their pre-war 2020 levels and analysis of trade data suggests that advanced chips and integrated circuits made in the EU and other allied nations are being shipped to Russia through third countries such as Turkey, the United Arab Emirates and Kazakhstan, the diplomat said, pointing to those private assessments.
EU and G-7 countries have introduced multiple rounds of sanctions since the invasion of Ukraine a year ago in an effort to degrade the Russian war machine and undermine its economy. The data suggest that the real effect in some areas is so far falling short of what officials might have hoped for.
“Just signing up to new sanctions is not enough,” said Daniel Tannebaum, global anti-financial crime practice leader at consulting company Oliver Wyman. “Governments now need enforcement mechanisms.”
Shipments from China to Russia have also surged as Beijing plays an increasingly important role in supplying Moscow, the diplomat added, asking not to be named discussing sensitive information. Those countries outside the EU haven’t sanctioned Russia themselves, but most have repeatedly denied they are helping the Kremlin.
The EU has sanctioned nearly 1,500 individuals, restricted exports on hundreds of goods and technologies, and targeted many of Moscow’s key revenue sources. But some officials worry that the bloc still lacks an effective apparatus to enforce those measures and lags the U.S.
With a longer history of sanctioning foreign powers, the U.S. has a centralized agency, more efficient procedures for gathering information as well as stringent legislation and the tools to enforce the rules at home and abroad.
In the EU, enforcement is a patchwork effort that mostly falls to member states.
On the surface of things, sanctions appear to be effective. Russia’s economy has contracted and many of its banks and companies remain cut off from international financial and trading systems. There is also evidence that the restrictions on European and U.S. technologies have weakened key Russian industries and hampered their ability to innovate in the future.
But information collected by the Geneva-based Trade Data Monitor indicates that some sanctioned goods — particularly advanced semiconductors — are being diverted to Russia via third countries, many of which abruptly changed their trading habits following Russia’s invasion.
In some cases, the exports to Russia of technologies that could be used for military purposes in Ukraine have gone from effectively zero to millions of dollars.