Sanctions Continuing to Slash Russia Chip Imports, US Agencies Say in Joint Alert
Russian semiconductor imports have dropped 70% since the country became subject to broad Western sanctions and export controls earlier this year, the Commerce, Treasury and State departments said in a joint alert last week. The alert, which provides an overview of the U.S. restrictions, said the measures are having "significant and long-lasting consequences on Russia’s defense industrial base," which relies extensively on foreign-sourced items, especially on imported microelectronics. Russia's semiconductor shortage has also dramatically dropped automobile and consumer electronics production, the alert said. Sanctions and export controls have resulted in "a sharp economic contraction for Russia" that will continue to drag on the Russian economy for years, the alert said.
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The alert said the Office of Foreign Assets Control is prepared to use its "broad targeting authority" against non-U.S. persons that provide support to Russia's military industrial complex, as well as private military companies or paramilitary groups supporting Russia's war with Ukraine. OFAC said it will continue to "target Russia’s efforts to resupply its weapons and sustain its war" against Ukraine, including any foreign persons who assist Russia in those efforts.
Along with the alert, OFAC published another frequently asked question. FAQ 1092 explains that non-U.S. companies risk exposure to sanctions by providing military goods to Russia. OFAC may block persons determined to have assisted, sponsored or provided support for the war in Ukraine. OFAC also has robust targeting authorities that could provide for the blocking of persons who engage in the provision of military goods to Russia, including those operating in the materiel sector of the Russian economy, or those who have materially assisted sanctioned people or entities.
The alert followed a meeting by officials from 33 countries at the Treasury Department to discuss the effects of sanctions and export controls on Russia’s military-industrial complex and critical defense supply chains. The participants discussed additional steps they plan to take to further debilitate Russia’s military-industrial complex and undercut its ability to wage war, according to an OFAC press release. At the meeting, Deputy Treasury Secretary Wally Adeyemo spoke about Russia's difficulty in accessing advanced technology and its microelectronics shortage.