TechCrunch: Western Sanctions against Russia: Tips for Tech Companies Managing Compliance Risk

Anthony Rapa ● TechCrunch ● May 8, 2023 ●

As the war in Ukraine rages on, authorities are cracking down on the smuggling of U.S. technology in support of Russia’s war effort, an initiative with implications for the tech industry. One significant example of this is Russia’s drone program, with a December 2022 expose describing U.S. chips, circuit boards, and amplifiers found in downed Russian drones, and mapping part of the supply chain trafficking such items to Russia in spite of Western sanctions.

This has prompted broader concerns regarding the diversion of Western technology to Russia in support of illicit end-uses, such as, for example, the Russian government’s use of facial recognition technology to crack down on dissidents.

In response to this, the United States and its partners recently imposed new sanctions against Russia to coincide with the one-year anniversary of the invasion of Ukraine, including expanded export controls over drone components, electronics, industrial equipment, and other items. The U.S. government followed this up with an advisory warning companies of the risk of third parties diverting their products to Russia.

Suppliers of electronics, drone components, and other sanctioned items face the risk that third parties will divert their products to Russia’s defense industrial base or to the battlefield in Ukraine, given the Russian military’s continued demand for battlefield equipment. Companies can mitigate this risk by conducting due diligence on counterparties and by auditing sales channels.

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