Russia continues to receive US-made semiconductor chips despite export ban
A British firm allegedly shipped $1.2bn of electronics to Russia last year
Russia has managed to obtain US-made semiconductor chips despite the US imposing a ban on chip exports to Russia last year.
The Financial Times reports that a British company called Mykines Corporation LLP seems to have facilitated the sale of approximately $1.2 billion worth of electronics to Russia since the start of 2022, when Vladimir Putin launched a full-scale invasion of Ukraine.
Based in the London borough of Enfield, Mykines is listed in Russian custom records as having dispatched various shipments, including semiconductors, laptops, servers, computer components, telecoms network equipment and consumer electronics to Russia.
The records also indicate that the company has dealt with a range of brands, from Huawei and H3C to Intel, AMD, Apple, and Samsung.
The sale of these products to Russia without the British government's permission may potentially breach the country's sanctions, even if the goods are routed mainly through China.
The FT report uses analysis conducted by Maxim Mironov, a professor at IE Business School in Madrid, who accessed Russian customs records.
It highlights the complex ownership and opaque structure of Mykines Corporation, showing how it's possible to create entities that may seem legitimate but are difficult to trace, making them an ideal channel for activities such as exporting goods in violation of sanctions.
"All businesses registered in the UK are bound by law to comply with the Russia sanctions regime," a UK government spokesman told FT.
"We take potential breaches very seriously, but do not discuss the details of how we enforce trade sanctions for specific cases."
In a separate report by Nikkei, it is alleged that approximately $570 million worth of prohibited technology was routed through China and Hong Kong on its way to Russia last year.
According to Nikkei, the Russian customs data was obtained from Export Genius, an Indian research company, which examined the semiconductor import records from February 24 to December 31, 2022.
The records revealed 3,292 transactions worth at least $100,000 each, with 2,358 of them labelled as products of US chipmakers, including Intel, AMD, Texas Instruments, and many others. The total worth of those transactions amounted to $740 million.
Out of the 3,292 transactions, 1,774 were shipped from Hong Kong or mainland China. Many of the shippers were small or mid-size companies, some of which were established after the Ukraine invasion. The total worth of those 1,774 transactions amounted to $570 million.
According to Russian customs data obtained from research firm Cybex Exim, Hong Kong-based distributor Agu Information Technology conducted six transactions with Russian machinery wholesale company Mistral between September and December 2022, each worth $100,000 or more.
As per the Agu website, the company procures products from Intel and Samsung.
"Server hardware, network equipment and components directly from the manufacturer," the company states on its website.
Agu exported over 60,000 Intel semiconductors, with a total value of approximately $18.7 million. The exports included microprocessors priced at $13,000 apiece.
Russia's imports of semiconductors and electronic circuits saw a rise of 36% from the previous year during the period between January and September 2022, according to the Institute of International Finance.
The export data reported several high-value items, including microprocessors from Intel and AMD, as well as FPGAs from Xilinx, which is a subsidiary of AMD. FPGAs are a type of programmable integrated circuit that are predominantly used in missiles.
On 24th February 2022, the US imposed a ban on the export of American semiconductors to Russia, with the exception of humanitarian purposes and other special cases, following Russia's invasion of Ukraine. The objective of the ban was to reduce Moscow's capacity to wage war by cutting off its supply of semiconductors.
In February, G7 member states reportedly discussed the possibility of imposing sanctions on companies in China, Iran, and North Korea that are supplying Russia with parts and technology that can be used for military purposes, Bloomberg reported, citing unnamed sources.
China has denied allegations that its state-owned companies are providing assistance to Russia's war in Ukraine, stating that the US should cease its weapon exports if it wants the conflict to end.