How Western firms bypass sanctions to supply Russia with microchips used in missiles

Western countries continue to supply microchips to Russia despite the sanctions imposed by the US and EU due to Russia’s full-scale invasion of Ukraine. The Reuters investigation revealed how they circumvent sanctions.

Source: Reuters.

From April to November, the United States and several European countries supplied Russia with chips worth $777 million. And these are not ordinary chips but from world-famous leading companies.

What microchips are supplied to Russia despite sanctions

Intel, AMD, Texas Instruments, Analog Devices, and Infineon still send components to the aggressor country. For this purpose, intermediary firms were created in Turkey and Hong Kong and registered in March 2022.

According to Russian customs data, since March 2022, one of the companies has exported components worth at least $ 20 million to Russia for seven months, including chips from American manufacturers.

How do Western companies circumvent sanctions?

Turkish, Chinese, and even Estonian companies help Western producers circumvent economic sanctions and supply Russia with microchips.

Journalists have found that the CEO of the Russian logistics company Novelco Grigory Grigoryev founded the Turkish company Smart Trading Ltd. Russian customs declarations show that his company shipped products of American semiconductor manufacturers for at least 660 thousand dollars.

Grigoriev wrote on LinkedIn that Novelco has opened a branch in Istanbul and sends goods to Russia from Turkey, not complying with US and EU trade restrictions on Russia. 

Once the goods arrive in Turkey, “the shipments are processed for re-export,” after which the cargoes are sent to Russia by air, sea, road, and rail.

Which Western companies circumvent sanctions?

In addition, Russia is assisted by the Estonian company Elmec Trade, located in Tallinn. From April 1 to October 31, it sent goods worth at least $ 17 million to Russia.

Among the companies that supply Western technology to Russia is the Hong Kong-registered company Pixel Devices Ltd. According to Russian customs data, the company has shipped at least $210 million worth of electronics to Russia since April 1, including at least $50 million value of Intel and AMD products by October 31.

Company records show that Pixel Devices was registered in 2017 by Bigfish Investments Ltd, a Hong Kong firm controlled by Kirill Nosov, a Hong Kong resident with a Russian passport. The current owner of Pixel Devices is the Singaporean company Asia Global Neolink Pte Ltd, owned by the Seychelles company White Wings Ltd.

Currently, the sole director of Pixel Devices is Spaniard Pere Raura Cano, a director of Asia Global Neolink who runs an aviation club in Catalonia. He confirmed to reporters by phone that Pixel Devices supplies semiconductors and other products to Russia.

Russia buys foreign microchips with GLONASS navigation system support

So, Moscow manages to circumvent Western sanctions and buy microchips from foreign companies with GLONASS navigation system support. For this purpose, Moscow uses fraudulent companies as intermediaries.

A strategic solution to the problem is to stop manufacturing the microchips with the support of the GLONASS system (as well as any western technologies used by the Russian war machine only). 

The GLONASS system would not be able to direct Russian missiles, military drones, and other weaponry, killing Ukrainians, if international companies stop manufacturing relevant components.

Read also: Russia, bypassing sanctions, buy Western microchips used in its missiles and war drones