Russia is getting around sanctions to secure supply of key chips for war, 4 March 2023

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...

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...

While the European Commission, the bloc’s executive arm, monitors implementation and provides guidance, national authorities are responsible for identifying breaches and imposing penalties. And that means the results are inconsistent...

“Our sanctions are biting hard and contributing to sustained economic recession in Russia,” Commission Vice-President Valdis Dombrovskis said in Bulgaria last week. “But their effectiveness also depends on how well they are enforced”...

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...

Kazakhstan provides a key example. In 2022 the Central Asian nation exported $3.7 million worth of advanced semiconductors to Russia, up from a mere $12,000 worth the year before the war started...

The data show Turkey, Serbia, the UAE and a half-dozen other economies in Eastern Europe and Central Asia helped make up the shortfall. Meanwhile, shipments of high-tech components to those countries from the allied nations surged by a similar amount.

The same sort of patterns are apparent across hundreds of product categories, but it is especially acute when it comes to advanced chips and integrated circuits that can be used for military purposes, the diplomat said...