The EU must combat sanctions evasion not only outside the continent but also within its own territory

The circumvention of sanctions imposed by the EU against Russia allows this aggressor country to obtain electronic components for producing weapons, often of European origin. Therefore, EU countries must begin to combat sanction evasion not only outside their continent but also on their territory, strengthening control over the export activities of companies that produce microelectronics.

At a meeting of the EU Foreign Affairs Council, EU High Representative Josep Borrell stated: ‘Circumventing sanctions allows Russia to sustain its war machine. We see progress in overcoming such circumvention, but much more needs to be done. Electronic equipment and components of Western origin continue to be used in Russian weapons and military equipment. When you perform an autopsy on Russian weapons, you find Western electronic components there. So we must continue to fight against sanction evasion and start this work at home. We need to strengthen control over companies that export critical elements to third countries,’ Borrell noted.

It should be noted that as of the second half of 2024, companies specializing in engineering, drone assembly, and other devices were able to purchase about 86,000 various microelectronic components through official distributors, while the number from unauthorized sellers exceeded 4 million, according to Matthew Haber, the executive director of the New York company Cofactr. This demonstrates how sanctioned goods can reach Russia through third countries, despite compliance with restrictions by the manufacturers themselves.

Let’s give an example of sanction evasion. Some Analog chips that ended up in Russia were manufactured in factories in mainland China. Since the beginning of Russia’s full-scale invasion of Ukraine, about 60% of the supplies of these components were provided by a firm called Sunny Technology. However, according to Bloomberg, the company does not have a real office at the specified address in Hong Kong, and information about it is absent from corporate registries.

Chinese and Hong Kong companies are the main suppliers of Western electronics to Russia. The Russians use Chinese products in their simplest components. Among the major suppliers of sanctioned products to Russia are companies like Intel, Huawei, Analog Devices, AMD, and Texas Instruments, as well as Chinese firms Lenovo, Hikvision, and Inspur.

In the context of supply controls monitored by the EU, Russia is forced to pay several times more for these products. Transactions are significantly more expensive for Moscow because intermediaries inflate prices, taking advantage of the limited choice of suppliers.

Economic pressure is also a factor in restraining Russia, but it is insufficient to halt its intervention in Ukraine in the short term. If the development of Russia’s military-industrial complex is not blocked now, it could launch an attack on NATO countries by the end of the decade. This perspective was expressed by Bruno Kahl, president of the BND, amidst discussions about tightening sanctions and the security climate.

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