Export restrictions do not prevent the aggressor from striking Ukraine with missiles containing components of Western production. Why do the Russians manage to evade sanctions, and what should our partners do?
Experienced Fraudster
Shortly after Russia launched a full-scale invasion of Ukraine in 2022, Western countries swiftly imposed a range of sanctions against the aggressor, including export restrictions. These measures were designed, among other goals, to cut off the occupier’s access to microchips, semiconductors, and other advanced technologies that Moscow itself cannot produce.
However, as of 2024, it became apparent that Russia has not been completely cut off from the components it requires. This was notably illustrated by the discovery of Western technologies within the remains of cruise missiles launched by the Russians in January this year. Captain Andriy Rudyk, a representative of Ukraine Armed Forces’ Trophies and Prospective Armaments Research Centre, highlighted to the BBC that Russia attempts to integrate acquired foreign components with substitutes: “They either replace them with their own technologies or attempt to replicate foreign models. However, they are unable to achieve the same level of quality. This remains their primary challenge.”
Theft of technology has long been a primary focus of Russian intelligence services for decades. A prime example is the development of the first Soviet nuclear weapons, which relied on stolen information from the Manhattan Project in the 1940s. As time went on, the USSR recognised that it was practically impossible to establish its own microchip production. Hundreds of intelligence operatives were dispatched to various countries to steal technologies for the Soviet industry. By the late 1980s, a sophisticated global network of companies had emerged, facilitating the flow of components prohibited for export to the USSR directly to the aggressor’s factories.
The accounts of Irish microtechnicians Eoin and Denis Sugrue, who relocated to work in Moscow in the early 1990s, are revealing. In their memoir “The Russians Are Coming,” they recounted: “Working with components of Soviet production was quite a challenge. Eventually, we conceded and transitioned to using solely Western technologies. The main issue was obtaining access to them.”
Lack of Control
The efforts of Western nations to limit Moscow’s access to vital technologies led to the imposition of stringent restrictions, albeit with inadequate oversight of their enforcement. A similar scenario had been witnessed earlier in the United States attempts to block China’s access to similar technologies. Despite sanctions, advanced technologies continued to reach the production lines of Huawei and other Chinese firms. American companies have noted the immense challenge in monitoring the destination of goods sold overseas. When purchased by buyers from third-party nations, these products can then be freely traded with Russia, China, or other countries subject to sanctions.
Component manufacturers often prefer not to inquire about the fate of their products once they leave their facilities. In many instances, they enter into non-disclosure agreements with their clients. The US Department of Commerce and its European counterparts simply lack the resources to thoroughly inspect every contract and transaction. An illustrative case of a Western company caught illegally selling microchips to Rostec is that of the French firm Ommic. However, in this particular instance, the French were essentially collaborating directly with the Russians through a network of shell companies, and Ommic’s director, Mark Rokki, held regular meetings with the seasoned Russian smuggler Maxim Yermakov.
However, in most cases, Western companies are unaware (and often prefer to remain unaware) that they are engaging with Russian entities. The transportation of components to the aggressor’s territory occurs via networks of shell companies in third-party nations that do not adhere to the sanctions regime. Some of the most frequently utilized countries include Serbia, the UAE, Armenia, and Turkey.
What needs to be done?
Professor Chris Miller from the Fletcher School at Tufts University suggests that component manufacturers ought to be mandated to incorporate geolocation devices into their products. Take, for instance, Apple’s AirTag technology, priced at $30, which can be affixed to high-value equipment, enabling the tracking of its whereabouts. This data can then be transmitted to regulatory authorities.
The implementation of geolocation should serve as the initial step. Subsequently, efforts should be made to regulate sophisticated dual-use computers that could function as control systems for artillery and other weaponry. In terms of technology, it is feasible not only to pinpoint the location but also to discern the manner in which the technology is utilised.
Miller compares export sanctions to battling a modern-day hydra: “When we manage to expose one network of companies, another inevitably springs up. We don’t have an answer to how quickly and to what extent these networks supply technologies to Russia.”
In conclusion, it is important to remember that sanctions did restrict Russia’s access to components it could previously purchase openly on the market. Presently, the aggressor relies on Western technologies to a significantly lesser extent, seeking substitutes. However, this is currently adequate for the continuation of the large-scale war, and Moscow is gradually adjusting to these challenges. As such, the West must act swiftly to sever the aggressor’s access to necessary goods at the highest possible level.
