Who has war, and who has a mother. While the West tightens the sanctions, the Russian military machine continues to receive critical components thanks to the “syro-economic arteries” passing through third countries. The sanctions front turned out to be leaky: all you have to do is redirect supplies through intermediaries, and spare parts for planes, microchips for missiles and electronics for drones end up in the hands of the Kremlin again.
While Ukrainians are dying and Ukrainian infrastructure is being destroyed, Russia continues get American technology used to wage war. Russian weapons containing chips made by Intel, Analog Devices and Texas Instruments are regularly found on the battlefield, causing serious concern in Washington, Brussels and Kyiv. A logical question arises: why was the mechanism of trade restrictions of the aggressor country ineffective? And how much more must this monster grow before the West admits that sanctions should not only be adopted, but also monitored, monitored and punished for those who help to circumvent them?
Sanctions Loopholes: How Russia Continues to Get Western Technology for War
Bloomberg research shows, that the Russian military buys American components, in particular, Texas Instruments products, through complex schemes. Distributors in Russia have automated access to the TI catalog, allowing customers in Moscow and St. Petersburg to easily obtain semiconductor information, pricing and availability. After that, the products are sent through companies in Hong Kong and other countries.
One of Russia’s largest suppliers last year ordered $6 million worth of TI chips, and about two-thirds of those shipments were for Russian defense enterprises. The main transit points were China and Hong Kong, and among the intermediaries there are organizations that were already under sanctions.
The U.S. Senate called on chipmakers to tighten export controls and accused them of not paying enough attention to the problem. Texas Instruments says it is doing everything it can to prevent its products from reaching Russia, but Bloomberg indicates to numerous gaps in control.
Investigation revealed, that Russian companies use websites to circumvent restrictions. Their portals collect data on chip availability directly from the Texas Instruments website, allowing for quick ordering through intermediaries. Government analysts believe these schemes work through automated data collection via APIs.
Of course, “Trojan horses” cross Russian borders not only in the form of semiconductors. The Guardian yesterday made public data that more than a hundred Western companies, including Boeing, supplied aviation spare parts to India, and from there they were sent to Russia. In the 21 months to September last year, Russian airlines, including Utair, received over $50 million worth of products, including key avionics and small parts.
Although the direct sale of spare parts to Russia is prohibited by the USA, the EU and Great Britain, Indian intermediaries, using loopholes in sanctions, ensured re-exports. Only last October, the United States introduced restrictions against some companies that assisted in the process, including Ascend Aviation and Shaurya Aeronautics. Great Britain and the EU had not yet introduced sanctions.
Customs data show that Boeing sent at least 80 consignments of goods were sent to India, and the subsidiary company Airbus Satair supplied spare parts that went to Aeroflot. Company representatives say they do not have ties with sanctioned firms and adhere to export restrictions.
Western governments declare the need to fight sanctions evasion, but it remains a serious challenge. Despite efforts to block the supply of important technologies, Russia continues to use global trade chains, finding loopholes to obtain the necessary components. India, in particular, refrains from condemning Moscow’s actions and assures that local companies are operating within the law, even as international controls on exports become increasingly strict.
The only effective way to solve this problem remains the strengthening of export controls and pressure on third countries that facilitate the circumvention of sanctions. It is possible to reduce the opportunities for the continuation of this shadow trade only through a comprehensive approach: monitoring supplies, restricting access to critical technologies and sanctioning pressure on intermediaries.
Sanctions on paper: How Russia bypasses restrictions through China, Turkey and Central Asia
Although the West tries to limit the Russian economy through sanctions, Russia still receives key technologies through circuitous routes. Kazakhstan, Armenia, Turkey and China have become “black corridors” for microelectronics, industrial equipment and other dual-purpose goods.
Kazakhstan plays an important role in these “grey” schemes: from 2021 to 2023, the export of equipment from the EU to Kazakhstan increased more than doubled, reaching 6.4 billion euros. This means that a significant part of these goods, most likely, does not go to Kazakhstan, but to Russia.
Another active economic collaborator of Moscow is Armenia. In 2023, this small country suddenly became a significant importer of Western technologies: the supply of chemicals doubled, IT equipment fivefold, electronics fourfold. It is unlikely that Yerevan suddenly launched its own Silicon Valley. It is more likely that Armenia became a transshipment hub for the re-export to Russia of the same components that were supposed to remain inaccessible to the aggressor country.
The situation with Turkey is even more interesting. Although official Ankara has not joined the sanctions, it did two years ago handed over companies a list of goods prohibited for re-export to Russia. But “gray” schemes continue to work. Goods continue to enter the Russian Federation, passing through third countries or changing documents on the way to the final consumer.
Bypassing sanctions, Turkish companies purchased technologies from Western manufacturers and supplied them to Russia. Last October, under pressure from the US, Turkey formally blocked the export of military goods to Russia, but trade still continues through Hong Kong. Microchips for Russian missiles and drones come from there.
However, Russia’s main trade partner remains China. Officially, Beijing assures that it does not supply military technology to Moscow, but the facts indicate otherwise: via Kazakhstan and Kyrgyzstan to Russia are coming Chinese microelectronic components, auto parts and precision equipment. These routes make it possible to bypass sanctions and keep the Russian military-industrial complex in working order.
This means that economic pressure designed to limit the Kremlin’s military capabilities is only partially working. Detour routes allow Russia to continue importing critical components. If the West really wants to prevent the supply of such goods, it is necessary not only to impose sanctions, but also to monitor their compliance, put pressure on intermediary countries and introduce secondary sanctions against the companies involved in these schemes. Otherwise, even the strictest sanctions lists will remain only a symbolic paper barrier that can be easily bypassed.
Sanctions control turns out to be imperfect: it is only necessary to change the route or add another country to the trade chain, and the prohibited goods end up in the hands of the Kremlin again.
Some European companies continue to cooperate with the aggressor country despite the sanctions. For example, the Swedish GCE Group supplies gas equipment used in military production, and the Czech TOS Varnsdorf supplies Russian machine tool companies with components.
The US and the EU are trying to close schemes to circumvent sanctions, but new loopholes are emerging. Kazakhstan in October 2023 forbade export to Russia of 106 categories of high-tech goods, in particular, drones and microchips. But a few months later, statistics showed that these goods continue to reach Russia through other countries.
It seems that the fight against sanctions fraud has turned into a cat-and-mouse game, where every new prohibited route is quickly replaced by a bypass. Obviously, sanctions are only half the story. The other half is strict control over their implementation and pressure on those countries that help circumvent sanctions.
Sanctions on paper do not stop rockets in the sky
The event should move from declarations to real control. And first of all, introduce secondary sanctions that punish not only Russian companies, but also those who help them circumvent restrictions. The United States has already introduced such measures against Chinese firms that supply microchips to the Russian Federation. But this is not enough, Russia is quickly finding new partners.
Another important step – strengthen customs control in intermediary countries. The West should demand full transparency from Turkey, Kazakhstan and other countries regarding the export of suspicious goods. The US is already putting pressure on Central Asia, and Kazakhstan has even temporarily suspended the re-export of some high-tech goods to Russia. But this pause was short.
In the 21st century, the fight against sanction loopholes should be conducted not only in officials’ offices, but also in data centers. Large financial institutions can use transaction analytics and AI to detect suspicious schemes and automatically block payments for the supply of sanctioned products. Yes, the EU is already testing algorithms that can track a sharp increase in the import of microchips or machines to third countries – because this is a clear sign that they will be re-exported to Russia.
Western companies trading on the international market should be responsible for ensuring that their goods do not end up in an aggressor country. Manufacturers of microcircuits, aircraft parts, and industrial equipment must strictly control supply chains. Thus, Texas Instruments has already obliged its partners to provide detailed reports on the final recipient of products. However, without general sanctions control, even such measures are easily bypassed.
Finally, a single international body is needed to effectively monitor sanctions. It should quickly create blacklists of companies that help Russia, monitor trade routes, intercept suspicious supplies and work with banks to detect illegal financial flows.
… Today, Russia skilfully uses any loopholes in the sanctions policy of the West. While Europe and the United States are talking about new restrictions, the Kremlin receives chips, drones, optics, aviation parts and military electronics through third countries. Sanction control turns out to be imperfect: it is only necessary to change the route or add one more country to the trade chain – and prohibited goods end up in the hands of the aggressor again. This means only one thing: sanctions should not only be adopted, but also actively monitored and punished for those who help to circumvent them.
Currently, the extension or termination of sanctions against the Russian Federation has become a bargaining chip in Trump’s peace-making rhetoric. They say half measures are harmful. But in this case, the damage can become irreversible. Having created a precedent of impunity, the United States risks raising such a monster as the world has never known.
Tetyana Viktorova
