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Russia finds way around sanctions on battlefield tech: report

Russia finds way around sanctions on battlefield tech: report

by host

Russia has largely succeeded in finding ways to get around sanctions on the technology it needs to fight its war against Ukraine, and that means the West needs to make the trade curbs more effective if it is to restrict Vladimir Putin’s aggression.

That’s the main takeaway of an in-depth report by a U.S.-Ukrainian research team, which found that Russian imports of “battlefield goods” sanctioned by Washington and its allies totaled nearly $9 billion from January to October of last year — down just 10 percent from the level that preceded the full-scale invasion of Ukraine in February 2022.

Russia needs microchips, sensors and navigation systems to replenish stockpiles of weapons like its Kinzhal hypersonic missiles or reconnaissance and attack drones — including Iranian-made Shahed drones — to keep up the furious aerial assault that it launched in December and has continued in the new year.

“If anything, Russia’s capacity to manufacture missiles and drones appears to have increased in 2023,” finds the joint study by the Yermak-McFaul International Working Group on Russian Sanctions and the KSE Institute, a think tank affiliated with the Kyiv School of Economics.

Russia’s missile production capacity is estimated by Ukraine to have been 50 per month in 2022, doubling to 100 by mid-2023 and reaching 115 by the end of the year. However, if Russia continues to unleash its arsenal at current rates, that still means it will deplete its stocks, the study’s authors conclude.

“We see that they are still trying to build their production capacity,” said Olena Bilousova, senior research lead, military and dual-use goods, at the KSE Institute. “But even with this growing capacity, they can’t restore the stocks of missiles that they had in February 2022.”

The analysis showing a gap between Russia’s missile consumption and its ability to replace them from its own production comes after the White House, confirming a recent report in the Wall Street Journal, said Moscow had used North Korean ballistic missiles in Ukraine and was seeking to obtain more from Iran.

Arming the enemy

Although Ukraine’s allies have supplied the air defense systems that have neutralized most of Russia’s airstrikes, it’s also the case that companies headquartered in coalition countries have made many of the nearly 2,800 components subject to sanctions that have been found in wreckage on the battlefield.

Detailed analysis of Russian trade figures reveals that Western companies supplied 48 percent of such battlefield components in the first 10 months of last year, the report finds, above the 45 percent accounted for by China.

U.S. semiconductor giant Intel tops the list of the makers of battlefield goods obtained by Russia, followed by Huawei of China. Also in the top 10 are Analog Devices, AMD, Texas Instruments, IBM and Dell — all American companies.

When it comes to the countries in which the components are made, sold and shipped, China and Hong Kong are the dominant suppliers, the study finds, confirming anecdotal evidence that Russia has managed to reconfigure its supply chains. Other leading conduits are Turkey and the United Arab Emirates.

The United States and European Union have launched a diplomatic push to persuade these third countries not to facilitate such exports. But, the authors of the report, titled “Challenges of Export Control Enforcement,” argue that coalition governments must do more to require companies to police how their products are used.

The report’s main recommendations are:

-Bolstering corporate responsibility: Improved export controls need to be backed up with buy-in from the private sector. To create incentives for companies to set up compliance procedures, enforcement agencies need to investigate and fine those responsible for significant violations.

-Closing export controls policy gaps: Coalition export controls should apply extraterritorially, as U.S. controls do under the Foreign Direct Product Rule (FDPR).

Targeting third-country circumvention: Trade quotas or bans should be imposed on specific goods or countries if diplomatic outreach fails to persuade third countries to desist from aiding sanctions circumvention.

-Strengthening institutions and cooperation: Enforcement agencies need to be strengthened — especially in the EU, which lacks its own sanctions authority, leaving it to its member states responsible to implement them.

Graphics by Giovanna Coi.

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