Late last month, U.S. and EU officials exchanged information on millions of dollars worth of banned technology that was slipping through cracks in their defenses and into Russian territory.
Slides from the March 24 meeting obtained by The New York Times show top tax and trade officials pointing to a surge in sales of chips and other electronic components to Russia through Armenia, Kazakhstan and other countries. They also shared information on the flow of eight particularly sensitive chips and other electronics they believe are critical to the development of weapons, including the Russian cruise missile that hit Ukraine.
The United States and its allies have been waging a parallel battle to keep chips needed for weapons systems, drones and tanks from falling into Russian hands as Ukraine seeks to push Russia out of its territory.
But keeping Russia from getting the chips has been a challenge, and the U.S. and Europe have yet to achieve clear victories. While Russia’s ability to manufacture weapons has been curtailed by Western sanctions imposed more than a year ago, the country is still deriving many electronic components.
The results were devastating: While the U.S. and the European Union joined forces to arm the Ukrainians to continue fighting Russia, their own technology was used by Russia to fight back.
U.S. officials argue that the sweeping sanctions, which they have imposed in cooperation with 38 other governments, have severely damaged Russia’s military capabilities and increased the cost of Russian procurement of the components it needs.
“My view is that we’ve been very effective at blocking Russia’s ability to maintain and reorganize its military,” Alan Estevez, who oversees U.S. export controls at the Commerce Department’s Bureau of Industry and Security, said in a March interview. said in. .
“We recognize that this is very hard work,” Mr Estevez added. “They’re adapting. We’re adapting to their adaptation.”
There is no question that trade restrictions have made it harder for Russia to acquire battlefield-ready technology, much of it designed by companies in the United States and allies.
Direct chip sales from the U.S. and its allies to Russia have plummeted to zero. U.S. officials say Russia has exhausted much of its supply of its most accurate weapons and has been forced to replace them with lower-quality or counterfeit components that would reduce the accuracy of its weapons.
But trade data show that other countries have stepped in to give Russia some of what it needs. After a sharp drop in the immediate aftermath of the Ukrainian invasion, Russian chip imports started to pick up, especially from China. Monthly imports in the October-January period were 50% or more of the median prewar level, according to the Silverado Policy Accelerator, a think tank.
Sarah V. Stewart, Silverado’s chief executive, said the export controls imposed on Russia disrupted existing supply chains, calling it “a very positive thing.” But she said Russia “continues to acquire a fair amount” of chips.
“It’s really a supply chain network that’s very, very large, very complex and not necessarily transparent,” Ms Stewart said. “Chips are really everywhere.”
As Russia tries to skirt the restrictions, U.S. officials have steadily tightened their rules, including imposing sanctions on dozens of companies and organizations in Russia, Iran, China, Canada and elsewhere. The U.S. has also expanded trade restrictions to include toasters, hair dryers and microwave ovens, all of which contain chips, and established a “Disruptive Technology Strike Force” to investigate and prosecute illicit actors seeking to obtain sensitive technology.
But given the ubiquity of semiconductors, the illicit trade in chips has proven difficult to police.company Shipped 1.15 trillion chips Available to customers worldwide in 2021, adding to the vast global inventory. China, which is not part of the sanctions regime, is producing increasingly complex chips.
The Semiconductor Industry Association, which represents major chip companies, said it was working with the U.S. government and others to fight the illicit trade in semiconductors, but controlling its flow was extremely difficult.
“We have strict protocols in place to remove bad actors from our supply chain, but with some 1 trillion chips sold globally each year, it’s not as simple as flipping a switch,” the association said in a statement. “
So far, the Russian military appears to have relied on the vast stockpiles of electronics and weapons it had amassed prior to the invasion. But that supply may be drying up, making Russia’s need for new shipments all the more urgent.
A report released on Tuesday Conflict Armament Research, an independent group that examines Russian weapons recovered from the battlefield, has revealed the first known example of Russia manufacturing weapons using chips made after the invasion began.
In February and March, three identical chips were found in Lancet drones recovered from various locations in Ukraine, manufactured by a U.S. company at an offshore factory, according to Damien Spleeters, who led the CAR investigation.
Mr. Spleeters said his team did not disclose the maker of the chip, but worked with the company to track how the product ended up in Russia.
Mr. Spleeters said the chips were not necessarily examples of export control violations because the US did not issue restrictions on this particular type of chip until September. The chips were manufactured in August and may ship soon, he said.
But he sees their existence as evidence that Russia’s vast prewar electronics stockpile is finally depleting. “Now we’re going to start seeing if the controls and sanctions are working,” Mr Splitters said.
The Kalashnikov Group, the parent company of the UAV design company, Russia’s main arms manufacturer, has openly challenged the technological limitations of the West.
“It is impossible to isolate Russia from the entire global electronic components base,” said Alan Lushnikov, the group’s president. in a russian interview Last year, according to the translation Report by the Center for Strategic and International Studies, a think tank. “It would be impossible to think otherwise.”
Gregory Allen, one of the report’s authors, said at an event in December that the sentence contained “some bravado.” But he added: “Russia will go to great lengths to get around these export controls. Because for them, the stakes are very, very high.”
As documents from the March meeting show, U.S. and European officials are increasingly concerned about Russian rerouting of U.S. and European goods through Armenia, Kazakhstan and other Central Asian countries.
A document bearing the seal of the US Bureau of Industry and Security states that by 2022, Armenia will import 515% more chips and processors from the US than in 2021 and 212% more from the EU, and then export 97% of them. The same product was sold to Russia, the document said.
In a separate document, BIS identified eight categories of chips and components considered critical to Russia’s weapons development, including a type of chip and component called a field programmable gate array, which Has been spotted in a variant of the Russian cruise missile KH-101.
The intelligence sharing between the U.S. and Europe is part of a fledgling but intensifying effort to minimize the leakage of such items to Russia. While the US is experienced in enforcing sanctions, the EU lacks centralized intelligence, customs and enforcement capabilities.
Both the United States and the European Union have recently sent officials to countries that ship more goods to Russia in an attempt to reduce the trade. Mr Estevez said a recent visit to Turkey had persuaded the government to stop transshipping cargo to Russia through the free trade zone and stop servicing Russian and Belarusian aircraft at Turkish airports.
Electronic equipment exports to Russia and Belarus will drop 41% between 2021 and 2022 as the U.S. and its allies expand restrictions around the world, Biden administration officials said.
Matthew S. Axelrod, the assistant secretary for export enforcement at the Bureau of Industry and Security, said it was one of “substantial declines.”
“But there are still certain areas of the world that are being used to ship these items to Russia,” he said. “This is an issue of great concern to us.”
john ismay Contribution report.