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Bloomberg: US sanctions office looks into chip supply companies over use in Russia's war

by Kateryna Denisova and The Kyiv Independent news desk April 12, 2024 11:30 PM 2 min read
Illustrative photo of a Russian missile fragment in a park in Kyiv on March 24, 2024. (Danylo Antoniuk/Anadolu via Getty Images)
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The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) is investigating several U.S. and foreign companies for supplying military-purpose chips which end up in Russia, Bloomberg reported on April 12, citing an unnamed U.S. official.

Foreign-sourced goods and materials such as microchips fuel Russia's war machine amid the full-scale invasion of Ukraine, allowing Moscow to construct missiles, drones, and more.

Despite sanctions, Moscow imported advanced chips valued at over $1 billion from U.S. and European companies during the initial nine months of 2023, according to classified data from the Russian customs service obtained by Bloomberg.

Senior officials from the Treasury Department, the Department of Commerce, and the State Department have asked U.S.-based microelectronics manufacturers to stop the flow of chips to Russia, Bloomberg's source claimed.

Most of 2,500 foreign components Ukraine found in Russian weapons come from US (GRAPHS)
Nearly three-quarters of the roughly 2,500 foreign components found in Russian weaponry and analyzed by Ukrainian authorities were made by U.S. producers, a database by the National Agency on Corruption Prevention (NAZK) reveals. Foreign-sourced goods and materials such as microchips fuel Russia’s…

One aspect of the OFAC probe reportedly examines whether U.S. financial institutions are being used to facilitate trade with sanctioned individuals.

Experts are working with the companies to analyze data on more than 600 distributors that apparently continued to sell restricted details to Moscow, seeking to remove these distributors from their supply chains, the U.S. official told Bloomberg.

Ukraine's National Agency on Corruption Prevention said last December that out of the roughly 2,500 foreign components found in Russian weaponry, nearly three-quarters were made by U.S. producers.

Kyiv's partners have been ramping up their efforts to prevent Russia from circumventing the sanctions via third-party countries.

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