Russia is importing Western weapons technology, bypassing sanctions, 18 April 2023

...U.S. and EU officials traded information on millions of dollars worth of banned technology that was slipping through the cracks of their defenses and into Russian territory...

Direct sales of chips to Russia from the United States and its allies have plummeted to zero. U.S. officials say Russia has already blown through much of its supply of its most accurate weapons and has been forced to substitute lower-quality or counterfeit parts that make its weaponry less accurate.

But trade data shows that other countries have stepped in to provide Russia with some of what it needs. After dropping off sharply immediately following the Ukrainian invasion, Russia’s chip imports crept back up, particularly from China and Hong Kong. Imports between October and January were 50% or more of median prewar levels each month, according to tracking by Silverado Policy Accelerator, a think tank.

Sarah V. Stewart, Silverado’s CEO, said the export controls imposed on Russia had disrupted preexisting supply chains, and that was “a really positive thing.” But she said that Russia was “still continuing to get quite a substantial amount” of chips...

As Russia has tried to get around restrictions, U.S. officials have steadily ratcheted up their rules, including sanctioning dozens of companies and organizations in Russia, Iran, China, Canada and elsewhere. The United States has also expanded its trade restrictions to include toasters, hair dryers and microwaves, all of which contain chips, and set up a “disruptive technology strike force” to investigate and prosecute illicit actors trying to acquire sensitive technology...

But cracking down on illicit trade in chips is proving hard to police given the ubiquity of semiconductors. Companies shipped 1.15 trillion chips to customers globally in 2021, adding to a huge worldwide stockpile. China, which is not part of the sanctions regime, is pumping out increasingly sophisticated chips.

The Semiconductor Industry Association, which represents major chip companies, said that it is engaging with the U.S. government and other parties to combat the illicit trade in semiconductors, but that controlling their flow is extremely difficult.

“We have rigorous protocols to remove bad actors from our supply chains, but with about 1 trillion chips sold globally each year, it’s not as simple as flipping a switch,” the association said in a statement...