Russian imports of dual-use goods subject to sanctions by Washington and its allies totaled nearly $9 billion between January and October last year – just 10% below the level that preceded the full-scale invasion of Ukraine in February 2022. At the same time, an analysis of Russian trade figures showed that Western companies supplied 48% of combat components in the first 10 months of last year, exceeding China’s 45% share. Such conclusions are contained in the report “Problems of Export Control Enforcement” compiled by the international working group on sanctions against Russia (Yermak–McFaul Group) and the Kyiv School of Economics.
The list of manufacturers of dual-use goods received by Russia in 2023 is headed by US semiconductor giant Intel. It is followed by China’s Huawei. Next in the top 10 are American companies Analog Devices, AMD, Texas Instruments, IBM and Dell. Thus, almost half of the “combat” goods purchased by Russia during the first three quarters of 2023 are from manufacturers headquartered in countries that have imposed export controls, Politico writes.
Russia is in dire need of microchips, sensors and navigation systems to continue the active phase of combat operations in Ukraine, especially in terms of air attacks. They are needed to resupply weapons such as hypersonic Kinzhal missiles or reconnaissance and strike drones, including Iranian-made Shahed drones.
China, Hong Kong, Turkey and the United Arab Emirates are among the leading states that manufacture, sell and supply such components to Russia. The United States and the European Union are increasing diplomatic pressure on these states to curb exports of dual-use goods. However, the report’s authors argue that the Western coalition should make more serious efforts, in particular, to demand more careful control over the use of products from the manufacturing companies themselves.
The report’s recommendations include suggestions on ways to put pressure on governments and technology corporations to encourage them to create procedures that would prevent them from circumventing sanctions requirements. Thus, if diplomatic efforts fail to persuade third countries to refuse to help Russia circumvent sanctions, trade quotas should be imposed on those countries or on specific goods supplied from them. And law enforcement agencies are encouraged to investigate corporate violations and fine those responsible, especially within the EU, where responsibility for their exercise of sanctions enforcement powers is left to the discretion of the union’s member states.
In late December, U.S. President Joe Biden signed an executive order allowing the imposition of secondary sanctions against banks located in different countries that conduct transactions to pay for goods that Western countries have banned from being shipped to Russia. The banks in question were those conducting transactions with military and dual-use goods, such as microchips, machinery, chemicals used in the manufacture of weapons, ball bearings, and optical systems.
In addition to China, Hong Kong, Turkey and the UAE, the main centers of re-export to Russia are Morocco, Central Asian and Transcaucasian countries. As the Financial Times sources noted, Russian intelligence services have spent “considerable time and effort” to find ways to circumvent sanctions and export controls.
