President Joe Biden’s administration is set to further curtail the sale of semiconductor chips and other goods to Russia, expanding the current sanctions to focus on third-party sellers in China and other countries.
Closing loopholes
The expanded ban will restrict Russia’s access to critical technologies and hamper its war efforts in Ukraine, closing loopholes that have allowed Russia to circumvent previous restrictions and continue sourcing chips for military use.
Sources familiar with the plan revealed that the new sanctions would broaden the scope of existing export controls to include US-branded goods, even if manufactured abroad.
National Security Council spokesman John Kirby confirmed the forthcoming measures, saying: "We’re going to continue to drive up costs for the Russian war machine, and this week we will announce an impactful set of new sanctions and export control actions."
He emphasised that these actions would target entities and networks aiding Russia’s procurement of goods for its military.
The changes will include the identification of Hong Kong entities allegedly involved in funneling goods to Moscow, with specific addresses being published to aid enforcement.
The administration will also enforce stricter requirements for export licences for manufacturers or third-party sellers supplying chips to Russian military entities.
This measure is particularly aimed at curbing sales of chips made abroad but linked to US technology or equipment.
Support for Ukraine key at G7
The Biden Administration’s decision comes as the President prepares to join Group of Seven (G7) leaders for a summit in Italy, where bolstering support for Ukraine and constraining Russia will be key topics.
The expanded sanctions align with broader efforts by the US and the European Union to limit Russia's access to technologies essential for its war effort.
Despite multiple rounds of trade restrictions, Russia managed to import more than $1 billion worth of advanced chips last year, often through third-party countries or networks of intermediaries.
The new measures aim to tighten these channels, particularly focusing on Chinese intermediaries.
The European Union is also considering proposals to enhance checks on companies and hold them accountable for the actions of their subsidiaries and subcontractors involved in circumventing sanctions.
Additionally, the EU is contemplating sanctions on banks in third-party countries that facilitate transactions via Russian alternatives to the SWIFT payments system.
As Biden ramps up support for Ukraine ahead of the upcoming presidential election, his administration is also set to announce new sanctions against financial institutions and non-banks involved in the supply chain supporting the Russian military.
This includes detailing temporary denial orders for firms violating restrictions, especially those related to Russia’s aviation sector and enterprise software used within the country.