December 9, 2022

Sapiensdigital

Sapiens Digital

China aid to Russian military prompts sanctions on 5 companies

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The United States has accused several companies and research institutes in China of supporting Russia’s military after the Ukraine invasion began, in one of the first concrete signs of Chinese entities allegedly helping Russia against Washington’s wishes.

The Commerce Department said it was adding five of the companies to a trade blacklist known as the Entity List as punishment. It also accused two Chinese research institutes already on the blacklist since 2018 of supporting Russia’s military in recent weeks. Entities added to the list are effectively blocked from buying U.S. technology.

All of the companies and institutes have signed recent contracts to continue supplying Russia’s military, in violation of U.S.-led export controls aimed at blocking Russia’s access to high-tech components and equipment, the Commerce Department said.

“Today’s action sends a powerful message to entities and individuals across the globe that if they seek to support Russia, the United States will cut them off as well,” Alan Estevez, undersecretary of commerce for industry and security, said in a statement.

Exports to Russia from China plummet, study shows

As soon as Russia invaded on February 24, the U.S. and 37 allies hit back with coordinated export controls designed to deprive Russia’s military and high-tech industries of semiconductors, electronics and other critical components. China, a major manufacturer and tech exporter to Russia, did not join the blockade, leaving Western officials to worry that Beijing could continue or even increase deliveries to Russia — something the United States tried to head off by threatening to cut off tech deliveries to China if it did so.

In recent weeks, U.S. officials have said they didn’t see any “systematic effort” by China to help Russia evade Western sanctions, despite the “no limits” partnership that leaders Xi Jinping and Vladimir Putin declared in February. Trade data published this week, meanwhile, showed that China’s exports to Russia fell sharply after the war started.

But the latest Commerce Department action suggests some tech trade is continuing.

The agency did not say what type of goods the companies had agreed to supply Russia’s military. But several of the newly blacklisted companies with offices in China appear to sell electronics.

U.S. probing how American electronics wound up in Russian military gear

They are Connec Electronic Ltd., King Pai Technology Co., Sinno Electronics, Winninc Electronic and World Jetta, a logistics company. Three of them also have offices in other countries — Russia, Vietnam, Lithuania and Britain, the Commerce Department said. But it called them entities with “substantial/primary operations in China.”

The entities already on the trade blacklist since 2018, for the alleged “illicit procurement” of technology for China’s military, are China Electronics Technology Group Corporation 13th Research Institute and its subordinate institution, Micro Electronic Technology in China, the Commerce Department said. Both are units of the state-owned defense conglomerate CETC.

The companies could not immediately be reached to comment.

China’s embassy in Washington denied that the country had provided any assistance to Russia’s military. “China’s position on the Ukrainian issue is consistent and clear,” it said in a statement. “We have been playing a constructive role in promoting peace talks and have not provided military assistance to the conflicting parties.”

The statement added, “China
and Russia maintain normal energy and trade cooperation, and the legitimate interests of Chinese companies should not be harmed.” It said sanctions such as the Entity List “are against international law and basic norms governing international relations.”

Russia is an insignificant manufacturer of electronics and computer chips and has therefore long relied on imports, making it vulnerable to trade blockades.

Recent dissections of Russian drones, tanks and other equipment recovered in Ukraine have revealed a range of Western electronics inside. That has prompted U.S. federal agents to begin questioning U.S. technology companies about how their computer chips ended up inside the Russian gear.

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