Russia imports Western weapons technology, circumventing sanctions

Late last month, US and European officials exchanged information about banned technologies worth millions of dollars that were slipping through the cracks of their defenses and entering Russian territory.

Senior tax and trade officials noted an increase in sales of chips and other electronic components to Russia via Armenia, Kazakhstan and other countries, according to slides from the March 24 meeting obtained by the New York. Times. And they shared information about the flow of eight particularly sensitive categories of microchips and other electronic devices they deemed critical to weapons development, including the Russian cruise missiles that hit Ukraine.

As Ukraine tries to push Russia out of its territory, the United States and its allies are fighting a parallel battle to keep the chips needed for weapon systems, drones and tanks out of Russian hands.

But denying Russia access to the chips was a challenge, and the United States and Europe did not score a clear victory. While Russia’s ability to manufacture weapons has been reduced due to Western sanctions passed more than a year ago, the country continues to have backdoor access to many electronic components.

The result is devastating: while the United States and the European Union mobilize to supply the Ukrainians with weapons to continue to fight against Russia, their own technology is used by Russia to fight back.

US officials say the sweeping sanctions they imposed in partnership with 38 other governments have severely damaged Russia’s military capability and increased the cost to Russia of procuring the parts it needs.

“I think we’ve been very effective in hampering Russia’s ability to maintain and rebuild military strength,” said Alan Estevez, who oversees US export controls at the Department’s Bureau of Industry and Security. of commerce, in an interview in March. .

“We recognize that this is hard work,” Estevez added. “They adapt. We adapt to their adaptations.

There is no doubt that trade restrictions make it significantly more difficult for Russia to obtain battlefield-ready technologies, much of which are designed by companies in the United States and allied countries.

Direct chip sales to Russia by the United States and its allies have fallen to zero. US officials say Russia has already depleted much of its supply of the most accurate weapons and has been forced to replace substandard or counterfeit parts that make its weaponry less accurate.

But trade data shows that other countries have stepped in to supply Russia with some of what it needs. After falling sharply immediately after the Ukrainian invasion, Russian chip imports have rebounded, especially from China. Imports between October and January each month were 50% or more of pre-war median levels, according to monitoring by Silverado Policy Accelerator, a think tank.

Sarah V. Stewart, chief executive of Silverado, said export controls imposed on Russia had disrupted pre-existing supply chains, calling it a “really positive thing.” But she said Russia “still continues to get quite a significant amount” of tokens.

“It’s really a supply chain network that is very, very large and very complex and not necessarily transparent,” Ms Stewart said. “Fleas are truly ubiquitous.”

As Russia tried to circumvent restrictions, U.S. officials have steadily tightened their rules, including adding sanctions on 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 has set up a “disruptive tech strike force” to investigate and prosecute. illicit actors trying to acquire sensitive technologies.

But the illicit chip trade is proving difficult for law enforcement given the ubiquity of semiconductors. The companies shipped 1.15 trillion chips to customers around the world in 2021, adding to a huge global stockpile. China, which is not part of the sanctions regime, is producing increasingly sophisticated chips.

The Semiconductor Industry Association, which represents major chip companies, said it was engaging with the US government and other parties to fight the illicit trade in semiconductors, but controlling their flow was extremely difficult.

“We have stringent protocols to weed out bad actors from our supply chains, but with around a trillion chips sold globally every year, it’s not as easy as flipping a switch,” said the association in a press release.

So far, the Russian military appears to have relied on a large stockpile of electronics and weaponry that it accumulated before the invasion. But that supply could dry up, making it more urgent for Russia to secure new shipments.

A report released on Tuesday by Conflict Armament Research, an independent group that examines Russian weapons recovered from the battlefield, revealed the first known example of Russian weapons manufacturing with chips made after the invasion began.

Three identical chips, made by an American company in an offshore factory, were found in Lancet drones recovered from several sites in Ukraine last February and March, according to Damien Spleeters, who led the investigation for CAR

Mr Spleeters said his group was not disclosing the manufacturer of the chip as it worked with the company to trace how the product ended up in Russia.

These chips were not necessarily an example of an export control violation, Mr. Spleeters said, since the United States did not issue restrictions on this specific type of chip until September. The chips were made in August and may have shipped soon after, he said.

But he saw their presence as proof that Russia’s large stockpile of pre-war electronics was finally exhausted. “Now we will start to see if the checks and penalties will be effective,” Mr Spleeters said.

The parent company of the company that designed the drone, the Kalashnikov Group, a major Russian arms manufacturer, has publicly challenged the technology restrictions imposed by the West.

“It is impossible to isolate Russia from the entire global base of electronic components,” Alan Lushnikov, chairman of the group, said in an interview in Russian last year, according to a translation in a report by the Center for ‘strategic and international studies, a think tank. “It’s a fantasy to think otherwise.”

That quote included “some bluster,” Gregory Allen, one of the report’s authors, said at an event in December. But he added: “Russia will try to do whatever it takes to circumvent these export controls. Because for them, the stakes are incredibly, incredibly high.

As documents from the March meeting show, US and European officials are increasingly concerned that Russia is obtaining US and European goods by re-routing them through Armenia, Kazakhstan and other countries in the world. ‘Central Asia.

A document stamped with the seal of the US Bureau of Industry and Security indicates that in 2022 Armenia imported 515% more chips and processors from the United States and 212% more from the European Union than in 2021. Armenia then exported 97% of these. same products to Russia, the document says.

In a separate document, the Bureau of Industry and Security identified eight categories of chips and components deemed critical to Russian weapons development, including one called Field Programmable Gate Array, which had been found in a model of Russian cruise missile, the KH-101.

Intelligence sharing between the United States and Europe is part of a nascent but growing effort to minimize the leak of such elements to Russia. While the United States has more extensive sanctions enforcement experience, the European Union lacks centralized intelligence, customs and law enforcement capabilities.

Both the United States and the European Union recently dispatched officials to countries that were shipping more to Russia, in an attempt to curtail that trade. Mr Estevez said a recent visit to Turkey had persuaded the government to stop transhipments to Russia through their free trade zone, as well as the maintenance of Russian and Belarusian planes at Turkish airports.

Biden administration officials say shipments to Russia and Belarus of the electronic equipment they targeted have fallen 41% between 2021 and 2022, as the United States and its allies have expanded restrictions on electronics. global scale.

Matthew S. Axelrod, assistant secretary for export enforcement in the Bureau of Industry and Security, said that was a “large decrease.”

“But there are still certain areas of the world that are used to get these items to Russia,” he said. “It’s a problem we’re laser-focusing on.”

Jean Ismay contributed report.