Late last month, US and European Union officials exchanged information about millions of dollars worth of banned technology slipping through the cracks of their defenses into Russian territory.
Senior tax and trade officials noted an increase in chips and other electronic components being sold to Russia through 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 chips and other electronic devices they say are critical to weapons development, including Russian cruise missiles that hit Ukraine.
While Ukraine tries to keep Russia off its territory, the United States and its allies are fighting a parallel battle to keep the chips needed for weapons systems, drones and tanks out of Russian hands.
But denying Russia access to chips has been a challenge, and the United States and Europe have not had a clear victory. Although Russia’s ability to produce weapons has diminished due to Western sanctions passed more than a year ago, the country still gains access to many electronic components through detours.
The result is devastating: While the United States and the European Union come together to provide Ukrainians with weapons to continue fighting Russia, Russia is using their own technology to fight back.
US officials claim that the sweeping sanctions they have imposed in conjunction with 38 other governments have seriously damaged Russia’s military capability and increased the cost for Russia to buy the parts it needs.
“My view is that we have been very effective in hindering Russia’s ability to maintain and reassemble a military force,” said Alan Estevez, who oversees U.S. export controls at the Bureau of Industry and Security of the Commerce Department, in an interview in March. .
“We recognize that this is hard, hard work,” Mr Estevez added. ‘They adapt. We adapt to their adjustments.”
There is no doubt that the trade restrictions make it significantly more difficult for Russia to obtain technology that can be used on the battlefield, much of which was designed by companies in the United States and related countries.
Direct sales of chips to Russia from the United States and its allies have fallen to zero. US officials say Russia has already blown much of its stockpile of its most accurate weapons and has been forced to replace substandard or counterfeit parts that make its weapons less accurate.
But trade data shows that other countries have stepped in to provide Russia with some of what it needs. After a sharp decline immediately after the Ukrainian invasion, Russian chip imports crept up again, particularly from China. Imports between October and January each month were 50 percent or more of the median pre-war level, according to tracking by Silverado Policy Accelerator, a think tank.
Sarah V. Stewart, CEO of Silverado, said export controls imposed on Russia had disrupted supply chains already in place, calling it “a very positive thing.” But she said Russia is still getting “a pretty large amount” of chips.
“It’s really a supply chain network that is very, very large and very complex and not necessarily transparent,” Ms Stewart said. “Chips are really ubiquitous.”
While Russia has tried to get around the restrictions, US officials have steadily tightened their rules, including adding sanctions to dozens of companies and organizations in Russia, Iran, China, Canada and elsewhere. The United States has also expanded its trade restrictions to toasters, hair dryers and microwave ovens, all of which contain chips, and has created a “disruptive technology strike force” to investigate and prosecute illegal actors seeking to acquire sensitive technology.
But the illegal chip trade is proving difficult to control given the ubiquity of semiconductors. Companies shipped 1.15 trillion chips to customers worldwide in 2021, contributing to a huge global inventory. China, which is not part of the sanctions regime, is pumping out increasingly sophisticated chips.
The Semiconductor Industry Association, which represents major chip companies, said it is working with the US government and other parties to combat the illegal semiconductor trade, but controlling their power is extremely difficult.
“We have strict protocols to remove bad actors from our supply chains, but with about a trillion chips sold worldwide each year, it’s not as easy as flipping a switch,” the association said in a statement.
So far, the Russian military seems to have relied on a large cache of electronics and weapons it had accumulated before the invasion. But that supply could dry up, making it more urgent for Russia to bring in new shipments.
A report released Tuesday by Conflict Armament Research, an independent group that examines Russian weaponry recovered from the battlefield, revealed the first known example of Russia making weapons from chips manufactured after the invasion began.
Three identical chips, made by a US company at an offshore plant, were found in Lancet drones recovered from various locations in Ukraine last February and March, according to Damien Spleeters, who led the investigation for CAR
Mr Spleeters said his group did not reveal the manufacturer of the chip while it worked with the company to track how the product got to Russia.
These chips were not necessarily an example of an export control violation, Mr. Spleeters said, as the United States only issued restrictions on this particular type of chip in September. The chips were made in August and may have shipped shortly after, he said.
But he saw their presence as evidence that Russia’s vast pre-war electronics supply was finally running out. “Now we will see whether controls and sanctions will be effective,” said Mr Spleeters.
The parent company of the company that designed the drone, the Kalashnikov Group, a major Russian weapons manufacturer, has publicly challenged the West’s technological limitations.
“It is impossible to isolate Russia from the entire global electronic component base,” Alan Lushnikov, the group’s president, said in a Russian-language interview 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 differently.”
That quote contained “some gaffe,” Gregory Allen, one of the report’s authors, said at a December event. But he added: “Russia is going to try to do whatever it takes to get around 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 diverting them through Armenia, Kazakhstan and other Central Asian countries.
A document bearing the seal of the US Bureau of Industry and Security stated that Armenia imported 515 percent more chips and processors from the United States in 2022 and 212 percent more from the European Union than in 2021. Armenia then exported 97 percent of those same products to Russia, the document said.
In another document, the Bureau of Industry and Security identified eight categories of chips and components considered critical to Russian weapons development, including a so-called field-programmable gate array found in a model Russian cruise missile, the KH-101.
The intelligence sharing between the United States and Europe is part of a nascent but intensifying effort to minimize the leakage of such items to Russia. While the United States has more experience in enforcing sanctions, the European Union lacks centralized intelligence, customs and law enforcement capabilities.
The United States and the European Union both recently sent officials to countries that were shipping more to Russia to try and curb that trade. Mr Estevez said a recent visit to Turkey had convinced the government to halt transhipments to Russia through their free trade zone, as well as the servicing of Russian and Belarusian aircraft at Turkish airports.
Biden administration officials say shipments to Russia and Belarus of the electronic equipment they targeted fell 41 percent from 2021 to 2022 as the United States and its allies expanded their restrictions globally.
Matthew S. Axelrod, the deputy secretary for export enforcement at the Bureau of Industry and Security, said the picture was one of a “broad decline.”
“But still there are certain parts of the world that are used to get these items to Russia,” he said. “That’s a problem we’re laser-focused on.”
John Ismay reporting contributed.
