Tech Export Ban On Russia Takes Shape

More light has been shed on the US restrictions on tech exports to Russia, that encompass a broad range of US-made products, as well as items made by foreign businesses, built with US tech.

On Thursday night President Joe Biden had followed many other countries in announcing an expanded package of sanctions against Russia, its banks and oligarchs, because of its invasion of Ukraine.

At the same time, the President followed up on threats made earlier in the week by US officials, that the United States would ban the export of a swath of high and low-end technology and resources to Russia.

Russian blacklisting

President Biden confirmed more than half of high tech imports into Russia would be cut.

But what tech will be blacklisted for Russia going forward?

Reuters reported that US companies must now obtain licenses to sell computers, sensors, lasers, navigation tools, and telecommunications, aerospace and marine equipment to Russia.

The US will almost certainly deny almost all requests.

The new rules also force companies making tech products outside of America, but using US tools, to seek a US license before shipping to Russia.

These are similar restrictions that were first applied to companies shipping goods to China’s Huawei, which has proved to be highly damaging.

And the blacklisting of Russia may have already begun, as companies could opt to suspend all sales to Russia out of caution, legal experts have mooted.

Dan Goren, partner at law firm Wiggin and Dana, was quoted by Reuters as saying that a client that makes electronic equipment had already held shipments to a Russian distributor on Thursday.

According to American census data, US exports to Russia were limited to about $6.4 billion last year, with machinery and vehicles among big categories in past years.

What tech?

But the biggest pain for Russia will come from the US reach in banning the export of goods made by foreign players.

Many tech products made in Asia for example and destined for Russia include chips made with US tooling.

And it should be remembered that it is not just the US imposing these export restrictions.

Over two dozen members of the European Union, as well as the UK, Canada, Japan, Australia and New Zealand, are imposing similar export restrictions.

This means that a range of consumer tech, including household electronics (computers etc), humanitarian goods, and technology necessary for flight safety, can no longer be exported into Russia.

According to Reuters, smartphones are still permitted as long as they are not sent to Russian government employees or certain affiliates.

The US is also not currently restricting consumer encryption technologies, but it should be remembered that the US and other countries can add more items to the export blacklist.

TSMC agreement

Restrictions like this are likely to present a long-term challenge for Russian organisations.

For example, Taiwanese chipmaker TSMC, which is the world’s largest contract chip maker, was quoted by Reuters on Friday as confirming it is fully committed to complying with new export control rules.

That came after Taiwan’s government said it would join international sanctions on Russia for invading Ukraine.

“TSMC complies with all applicable laws and regulations and is fully committed to complying with the new export control rules announced,” it was quoted as saying in a statement.

“The company also has a rigorous export control system in place, including a robust assessment and review process to ensure export control restrictions are followed.”