Russian efforts to evade export control limits on dual-use goods and software have been the subject of new research by the International Task Force on Sanctions Against Russia, which is headed by Andriy Yermak, the chief of the office of the president of Ukraine, and Michael McFaul, director of the Freeman-Spogli Institute for International Studies.
Independent analysts come up with additional penalties and suggest better ways to apply the limits through the International Task Force on Sanctions, which has become an important platform. Andriy Yermak expressed his gratitude to all of the experts who helped shape the suggestions in the crucial domains of information technology and export controls.
Ambassador Michael McFaul stressed the importance of limiting Russia’s armament production. This is what I consider the number one priority for the sanctions policy. Despite the progress that has been made, our experts have identified many ways to increase effectiveness. We continue to work.”
The first research, “Problems of Ensuring Export Controls,” produced in collaboration with the Kyiv School of Economics, uncovers Russian suppliers of military and dual-use items. Russian military equipment has roughly 2,800 foreign components, and this paper investigates the parts and the firms that made them.
Significantly, with the implementation of limits, Russian Federation imports of military items nearly entirely recovered in 2023, reaching 90% of the volume prior to the full-scale war. Imports of dual-use items, on the other hand, fell by over 29 percent, proving that export restriction policies work when implemented correctly and enforced.
Samples of dismantled or confiscated Russian weaponry included products from over 250 Western businesses. Western industries provided Russia with $2.9 billion worth of essential items in the first 10 months of 2023. Between January and October of 2023, CNC machine imports to Russia reached $292 million, a 33% increase over the time before sanctions.
Experts agree that export limits should exceed Russia’s ability to circumvent them. Efforts to address the unique difficulties encountered at various points in the supply chain should inform these policies, which should seek to close loopholes in export control, hold corporations more accountable, foil efforts by other nations to evade these regulations, and fortify global collaboration and institutions.
Based on the findings of the first study, “How to Identify and Exploit Kremlin’s Weaknesses in Computer Networks and Software,” the second study examines how the Russian Federation uses Western software to run essential infrastructure in the energy, financial, military, and AI development and cloud computing spheres.
Red Hat Linux-based networked software systems are vital to Russia’s military-industrial complex. Western firms were also involved in the development of the Linux systems Neutrino, Alt 8 SP, and Astra.
Western software is vital for Russian energy corporations for calculating deposits in natural resource fields. Roxar RMS, Paradigm, STARS, and Landmark Engineer’s Desktop are important systems. These software programs are still available through regional resellers and representatives, even when sanctions are in place. Rosneft and Gazprom, two Russian oil companies hard hit by Western sanctions, are among the most prominent users of this program.
Oracle and Microsoft remain the software products of choice for Russian banks. As a result of issues with IBM and SAS systems, banks are exploring other software options, namely Digital Q.Reporting and Polymatica. That is why sanctions limitations have a chance to succeed when import substitution in the banking sector fails. Due to their reliance on VMware and Citrix, Russian institutions are forced to use alternative options that suffer from functional and dependability issues.
The group’s specialists concluded that imposing sanctions on Russian programmers and ceasing support for Russian software products by contractors from partner states is necessary. Furthermore, these contractors should face accountability for any violations of KYC (know your client) norms.
Creating a unique database of alternative software used by the Russian Federation, prohibiting Western firms from participating in joint projects, and halting money transfers with Russian companies should be considered. Additional restrictions are being considered.
If Western sanctions are entirely enforced, the restrictions will be efficient, and the Russian economy will be on the verge of collapse. Such a situation will force the Russian regime to deescalate its war of aggression in Ukraine. In addition, closing sanctions evasion schemes will block Russia’s capability to produce the weapons it uses to attack Ukrainian cities. So far, sanctions against Russia, together with military aid to Ukraine, was the best method to stop Russian invaders from capturing more Ukrainian territories.