Exports to Russia blocked by the United States and Allies

WASHINGTON – The United States, working with allies, has hit Russia with some of the most sweeping export restrictions ever imposed, barring companies worldwide from sending cutting-edge technology to punish President Vladimir Putin for the invasion of Ukraine.

The restrictions are aimed at cutting off the flow of semiconductors, aircraft components and other technologies vital to Russia’s defense, maritime and aerospace industries, crippling its ability to Putin’s war prowess. But the extent to which the measures hamper Russia’s capabilities will depend on whether companies globally comply with the rules.

Enforcing the new restrictions poses a significant challenge as governments try to police thousands of companies. But the task may become easier because the United States is coordinating operations with so many other countries.

The European Union, Japan, Australia, Canada, New Zealand, the UK and South Korea have joined the US in imposing their own restrictions. And governments including Singapore and Taiwana major global semiconductor manufacturer, has indicated that it will support the rules.

“Because we have full cooperation and alignment with so many countries, enforcement is a lot easier,” Gina Raimondo, US Secretary of Commerce, said in an interview. “Every country will do the enforcement.”

“If you want to, that’s part of the power of having a lot of collaboration,” she added.

Officials from the Commerce Department, the agency responsible for enforcing US rules, have begun digging up shipping containers and detaining electronic devices, aircraft parts and other goods being shipped. to Russia. On March 2, federal agents seized two speedboats in the port of Charleston worth $150,000 that were being exported to Russia, according to senior US officials.

To look for any potential violators, federal agents will review tricks from industry sources and work with Customs and Border Protection to find anomalies in data. Export data may indicate shipments to Russia. US officials say they are also contacting well-known exporters to Russia to get them to accept the new restrictions, talking to about 20 or 30 companies a day.

Their efforts extend beyond the borders of the United States. On March 3, Commerce Ministry officials spoke to 300 businessmen in Beijing about how to comply with the new restrictions. U.S. officials are also working with other governments to ensure they are taking a tough stance on enforcement, senior U.S. officials said.

Emily Kilcrease, director of the Energy, Economic and Security Program at the Center for a New American Security, said that the extent of allies’ cooperation in implementing export controls was “totally unheard of.” ever” and international coordination will play an important role.

“Allied nations will be active partners in enforcement efforts, rather than the United States trying to enforce its own rules unilaterally outside of its territory,” she said.

It remains to be seen how effective the rules are in reducing Russia’s military capabilities or deterring its aggression against Ukraine. But in its original form, the broad range of measures looks like a win for the multilateralism that President Biden has promised to restore.

Mr. Biden, when he took office, pledged to mend relations with Europe and other allies shunned by former President Donald J. Trump’s “America First” approach. An important part of the argument is that the United States can put more pressure on countries like China when it does not act alone.

That approach is especially important for export controls, which experts say can do more harm than good when imposed by just one country – a criticism that has sometimes granted at output controls The Trump administration has issued on China.

Russia’s invasion of Ukraine has united Western governments as few as before. But even for countries that want to sanction Russia, coordinating restrictions on a range of complex technologies among more than 30 governments is far from straightforward. The Commerce Department held more than 50 discussions with officials from other countries between late January and February 24, when the control measures were announced, as well as they published details, the a senior US official said.

Much of that effort belongs to Matthew S. Borman, a three-decade employee of the Department of Commerce, who began near-daily conversations with the European Commission and other countries in late January.

In mid-February, Mr. Borman and a senior aerospace engineer flew to Brussels to meet with Peter Sandler, European commercial director general, and other staff. As a “free convoy” protesting the coronavirus restrictions trying to reach Brussels, they work from early morning until late at night amid piles of paper and spreadsheets depicting complex technology.

Each country has its own byzantine regulations, and their own interests, to consider. The European Commission had to consult with the 27 member states of the European Union, in particular technology powers such as Germany, France, the Netherlands and Finland, about products that could be cut. Officials have debated whether to crack down on Russia’s oil industry, at a time of soaring gas prices and inflation.

As Russia’s neighbour, Europeans want to ensure that Russia still has access to certain goods for public safety, like nuclear reactor parts, to avoid a crisis. Chernobyl type. At least one country insists auto exports to Russia should continue, a senior administration official said.

The breakthrough came when American officials offered a compromise. The Biden administration planned to enact a rule that would ban companies around the world from exporting certain products to Russia if they were made with American technology. But those measures will not apply in countries that have joined the United States and Europe in enacting their own technological restrictions on Russia.

In an interview, Mr Borman said that US allies have historically been concerned about the extraterritorial reach of US export control measures, and that the exclusion of countries that impose them. setting their own rules is “really key”.

“We all recognize that at the strategic level the most important thing is to have a unified allied position,” he said.

The rules currently prevent companies around the world from sending high-tech items such as chips, telecommunications items and navigation equipment to Russia. They are even tougher on some entities with ties to the Russian military, which countries cannot import as much as pencils or toothbrushes.

Raimondo said the impact of these measures would likely be felt for months, rather than weeks, as Russian tanks and planes were destroyed and control measures prevented the Russian military from taking the material. whether to fix them. Over time, she said, the restrictions would prove “very ineffective against their military.”

While some companies may want to continue supplying parts to Russia if they violate those rules, US officials say there are strong anti-employment motivations, US officials said including detention of goods, fines and even imprisonment.

The Commerce Department has 130 federal agents working in 30 cities in the United States to check for violators, as well as nine overseas employees. Officials said they expected to add personnel in Europe and Asia to carry out more extensive inspections.

Kevin Wolf, an international trade partner at Akin Gump and a former Commerce Department official, said implementing the policy could be “extremely complicated” but would immediately change people’s behavior. company.

“Even if they’re not perfect, I still think you’ll see a significant response from multinationals to do everything they can to comply,” Mr. Wolf said.

“Just because everyone’s speed doesn’t mean you don’t have a speed limit,” he added.

One potential focus is China, which has shown unsettling allegiance to Russia. But Chinese leaders have also hint that they will comply with sanctions to protect their own economic interests.

Miss Raimondo warned that the United States could take “devastating” action against Chinese companies that violate the policy, cutting them off from the U.S. technology and equipment needed to manufacture their products.

“It is in their own interest not to provide these things to Russia,” she said.

On Monday, Jake Sullivan, national security adviser, met with a Chinese foreign affairs official, Yang Jiechi, in Rome to discuss reports that Russia has asked China for economic and military assistance for their war in Ukraine.

China has denied those reports. Jen Psaki, the White House press secretary, said on Monday that she could not confirm any intelligence, but that Mr. Sullivan had communicated that if China provided military or other assistance in violation of the order punishing or supporting the war effort “would have significant consequences. ”

“But on the specifics of how, we will work with our partners and allies to make that decision,” she added.

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