US Failing to Cut Off Tech Exports to Russia, Senator Says

Blumenthal revealed that during his recent trip to Ukraine, President Volodymyr Zelenskyy gave him documents showing that 211 parts made by U.S. companies ended up in missiles and other weapons that Russia has “used to kill Ukrainians on the battlefield.”

“The folder that he handed me was a powerful indictment of our export control and sanctions systems,” Blumenthal said while chairing a hearing of the Senate Permanent Subcommittee on Investigations. “Our sanctions system is a sieve. Our export control regime is lethally ineffective and something has to be done.”

Russia uses third-party intermediaries and bordering countries to evade U.S restrictions, the senator said. While he welcomed the latest round of Russia-related export controls and sanctions that the Biden administration announced Feb. 23 (see 2402230035), he said they must be accompanied by better enforcement. “We know that enforcement has been lacking,” he said. “Sanctions are a dead letter unless they are enforced.”

Blumenthal said he has “questions” for the Commerce and Treasury departments and companies whose products end up in Russian weapons. He plans to send a letter to Commerce asking what can be done to improve enforcement of export controls.

However, the subcommittee’s ranking Republican, Sen. Ron Johnson of Wisconsin, expressed doubt that better enforcement would solve the problem. Sanctions are “always going to be evaded,” he said. “You plug one hole, another hole’s going to be opening up. It’s going to be whack-a-mole.”

Johnson said that the U.S. should focus instead on reducing world tensions, as well as strengthening itself by curbing its federal debt and deficits, securing its southern border and increasing its domestic fossil fuel production.

James Byrne, director of the Open Source Intelligence and Analysis department at the Royal United Services Institute, a U.K. think tank, acknowledged that export controls and sanctions “don’t stop everything in one go” and are “not a silver bullet.” But he said those restrictions “do stop a huge amount of things that you don’t see as a result of the fact that they’re enforced.”

Elina Ribakova, director of the international affairs program and vice president for foreign policy at the Kyiv School of Economics in Ukraine, and Damien Spleeters, deputy director of operations at Conflict Armament Research in the U.K., both testified that many so-called U.S. parts that end up in Russia are actually made in U.S. companies’ overseas factories, suggesting a potential area for enhanced enforcement.

Ribakova also told the subcommittee that while the multilateral Wassenaar Arrangement was created to control a wide range of items, it should be replaced because Russia’s membership gives Moscow a veto over new measures. She also called for the U.S. to work with other countries to prevent Russia from obtaining equipment to make advanced chips. To prepare for such a cut-off, Russia has begun increasing its imports of such machinery, she said.

Sen. Maggie Hassan, D-N.H., who joined Blumenthal and other senators on their recent Ukraine trip, urged the Senate to pass a bill she introduced with Sen. James Lankford, R-Okla., to crack down on ships that disable and spoof their transponder equipment to evade sanctions against Russia (see 2307170006). The Senate Homeland Security & Governmental Affairs Committee approved the bill in July 2023.

Blumenthal said better enforcement would be no substitute for the U.S. continuing to arm Ukraine, including by the House approving the Senate-passed national security supplemental appropriations bill. “Ukraine can win, they will win, if they have that kind of support,” he said. “But without it, they will lose.”

While Commerce and Treasury didn't immediately respond to our requests for comment, three of the four U.S. chipmakers mentioned during the hearing issued statements saying they are taking many steps to ensure their products do not end up in Russian weapons.

Advanced Micro Devices has “processes in place to identify and take immediate action when we determine AMD products are being diverted into Russia,” the company said. “We continue to work with the government to identify parts recovered in Ukraine, partner with global customs to stop illegitimate shipments heading for Russia, assist global [non-governmental organizations] in mapping and disrupting downstream supply chains, and strictly enforce requirements for our authorized distributors and resellers.”

Analog Devices Inc. (ADI) said it “has robust internal policies, controls and practices to ensure sales of ADI products are made in compliance with export control laws in the U.S. and in other countries in which ADI operates.” For example, the company monitors “the Ukrainian National Agency on Corruption Prevention’s War & Sanctions website and database and deployed a third-party system to search the Internet for any designated ADI products posted online for sale by unauthorized sellers.”

Intel said it “continues to comply with all applicable export regulations and sanctions in the countries in which it operates, and Intel’s contracts require its customers and distributors to comply with the same regulations. Intel actively and diligently works to track and mitigate potential distributor issues and has zero tolerance for circumvention of its requirements.”

The fourth chipmaker, Texas Instruments, had no immediate comment.