Short circuit. How Europe turns a blind eye to Russia smuggling dual-use microchips, 21 August 2023

Despite export controls and sanctions imposed after Moscow’s full-scale invasion of Ukraine last year, The Insider has learned that tens of millions of dollars worth of microchips produced by two U.S. technology giants, Texas Instruments and Analog Devices, were shipped to Russia in a nine-month period in 2022. These microchips are used in Russian missiles and satellite communications integral to the Kremlin’s war effort, not to mention its ongoing attacks on Ukrainian civilian infrastructure.

Between early March and late November 2022, third-party companies supplied Russia with American-manufactured electronics from all over the world. Not only via main clearinghouses in China and Hong Kong, which don’t have sanctions in place against Russia, but also through Western companies in countries that do. They include Germany, Lithuania, the Netherlands, Estonia, and Finland, all EU and NATO allies, which have provided extensive humanitarian and military aid to Ukraine.

According to Russian customs declarations, between March 1 and November 30, 2022, $89 million worth of Analog Devices-manufactured microchips and $50 million worth of Texas Instruments-manufactured ones were imported into Russia from foreign jurisdictions. Many of those microchips have military applications, according to Leonid Dmitriev, a Ukrainian military expert The Insider consulted...

Import data is readily accessible to anyone through Import Genius, a fee-for-service website that allows people to examine customs traffic in a host of countries. The data set The Insider examined represents just a small snapshot of what looks like extensive violations of U.S. and EU sanctions in the course of the 18-month conflict.

The scheme was pretty straightforward: a private company registered in a foreign country acquired the Texas Instruments or Analog Devices microchips and then resold them to a private Russian import company. The bills of lading clearly identified the nature of the wares being shipped to Russia. The imports were next logged by the Russian Federal Customs Service. From there, their final destination and end-users remain unknown...

The Insider sent detailed questions to the Dallas-based Texas Instruments, one of the largest producers of microprocessors globally, and the Wilmington, Massachusetts-based Analog Devices. Neither responded.

Both companies, however, have declared their commitment to enforcing U.S. sanctions.

A statement posted on the Texas Instruments website currently reads: “TI is not selling any products into Russia or Belarus…TI complies with applicable laws and regulations in the countries where we operate. We do not support or condone the use of our products in applications for which they weren’t designed.” Similarly, Analog Devices has affirmed, “Following Russia’s invasion of Ukraine, and in compliance with U.S. and EU sanctions, Analog Devices ceased business activities in Russia, and in the Russian-backed regions of Ukraine and Belarus, and promptly instructed all of our distributors to halt shipments of our products into these regions.”

The U.S. has banned the sale of American-made integrated circuits and equipment to Russia without a license. Restrictions also affected the re-export of microchips, including those produced using U.S. technology. According to U.S. Secretary of Commerce Gina Raimondo, shortages of these goods have forced Russia to harvest chips from dishwashers and refrigerators. Similar sanctions are also in effect in the EU...

Russian economist Maxim Mironov analyzed Russian customs data and found that in 2022, imports of semiconductors almost doubled compared to before the war. An investigation jointly conducted by Reuters and the Royal United Services Institute (RUSI), a London-based think tank, showed that between April 1 and October 31, 2022, electronics worth $2.6 billion were imported into Russia, of which $777 million were made by Western firms, Texas Instruments and Analog Devices among them...