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Russia Is Getting Around Sanctions to Secure Supply of Key Chips for War

 1 year ago
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Russia Is Getting Around Sanctions to Secure Supply of Key Chips for War

Alberto Nardelli
Sat, March 4, 2023, 5:00 PM GMT+9·6 min read
a3568209de482774c6ca13b218d69ccc
Russia Is Getting Around Sanctions to Secure Supply of Key Chips for War

(Bloomberg) --

Most Read from Bloomberg

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.

EU and G-7 countries have introduced multiple rounds of sanctions since the invasion of Ukraine a year ago in an effort to degrade the Russian war machine and undermine its economy. The data suggest that the real impact in some areas is so far falling short of what officials might have hoped for.

“Just signing up to new sanctions is not enough,” said Daniel Tannebaum, global anti-financial crime practice leader at consulting firm Oliver Wyman. “Governments now need enforcement mechanisms.”

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.

The EU has sanctioned nearly 1,500 individuals, restricted exports on hundreds of goods and technologies, and targeted many of Moscow’s key revenue sources. But some officials worry that the bloc still lacks an effective apparatus to enforce those measures and lags behind the US.

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