Russia is getting better at evading Western sanctions on electronics, US official says

Western exports of key microchips and electronics that Russia needs to fuel its war machine are back to pre-invasion levels, as Moscow has ramped up efforts to circumvent sanctions, a top official said Wednesday.

“By the start of this year, Russia was able to reimport certain key categories of electronics at about pre-war levels,” Jim O’Brien, sanctions coordinator at the U.S. State Department, told POLITICO’s Brussels Playbook at an ECFR event in Stockholm, referring to chips, processors and integrated circuits key to making modern weapons.

The problem, O’Brien said, is that European companies are selling to other countries, which in turn resell the materials to Russia.

Sanctions circumvention remains a “substantial problem,” O’Brien said, adding the U.S. has identified issues with five countries in particular: Turkey, Kazakhstan, Georgia, the United Arab Emirates and Armenia.

The European Union is currently working on an 11th sanctions package against Russia, which could include unprecedented measures targeting countries that continue doing business with Moscow, thus allowing it to bypass the sanctions.

But several countries have concerns about the deal: Greece and Hungary are holding out over Ukraine listing some of their companies as “war sponsors,” while others, including Germany and France, fear the anti-circumvention ban could hurt diplomatic relations with third countries.

The European Commission, which has already watered down its initial proposals, presented a new version of the package at a meeting of EU ambassadors Wednesday, but countries were unable to find an agreement, several EU diplomats told POLITICO.

Trade between Russia and several countries from the Caucasus and Central Asia close to Moscow — including Georgia, Kazakhstan, and Armenia — has surged since the start of the Kremlin’s full-scale invasion of Ukraine, according to customs records seen by POLITICO.

Barbara Moens and Leonie Kijewski contributed reporting.