Russia has continued to stockpile Western microchips and semiconductors to enhance its modern technological war machine despite sanctions in place to deny the country exactly that.
While the sanctions prevent direct sales to Russia through the front door, Moscow continually takes advantage of convoluted transactions with intermediary countries — such as China — to accumulate Western technologies through the side door, according to a CNBC report Monday.
CNBC reported that Russia was able to import $2.5 billion worth of semiconductor technologies, up from $1.8 billion in 2021, despite the sanctions.
It's those semiconductors and microchips that help create drones, missiles, armored vehicles, and communications — all used in the offensive against Ukraine.
"The sanctions evasion and avoidance is surprisingly brazen at the moment," Elina Ribakova, senior fellow at the Peterson Institute for International Economics, told CNBC.
Ribakova co-authored a study, released in June, for the KSE Institute that analyzed 58 pieces of Russian equipment recovered from myriad battlegrounds in Ukraine. KSE found a total of 1,057 foreign components, half of those semiconductors and microchips.
Companies in the U.S. accounted for two-thirds of the 155 that produced the components, according to KSE, an analytical center at the Kyiv School of Economics.
"Russia is still being able to import all the necessary Western-produced critical components for its military," Ribakova said.
Another part of the problem reported by CNBC is that not all technologies are even subject to sanctions. Some components are marked as dual-use items, which carry domestic as well as military applications.
"It's difficult to stop strictly civilian microelectronics from crossing borders and from taking place in global trade," Sam Bendett, adviser at the center of Naval Analyses, told CNBC. "And this is what the Russian industry as well as the Russian military and its intelligence services are taking advantage of."
But when it comes to the sanctions workaround, Russia has found its most benevolent partner in China, including Hong Kong, which accounted for more than 87% of semiconductor imports in 2022, according to CNBC.
More than half of those technologies weren't manufactured in China, but instead flowed into the country before finding their way into Russia and, ostensibly, onto the war grounds in Ukraine.
"This should not be taken as a surprise because China is really trying to accumulate and to make profits and gains on the fact that Russia is economically isolated," Olena Yurchenko, adviser at the Economic Security Council of Ukraine, told CNBC.
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