US casts global net to stop shipments to Russia

WASHINGTON — The United States, in partnership with its allies, has hit Russia with some of the most sweeping export restrictions ever imposed, preventing companies around the world from sending cutting-edge technology to penalize President Vladimir V. Putin for his invasion of Ukraine.

The restrictions aim to cut off the flow of semiconductors, aircraft components and other technologies crucial to Russia’s defence, maritime and aerospace industries, in a bid to cripple Mr Putin’s ability to wage war . But the extent to which the measures actually hamper Russia’s capabilities will depend on whether or not companies around the world follow the rules.

Enforcing the new restrictions poses a daunting challenge as governments try to control thousands of businesses around the world. But the task could be made easier because the United States is acting in concert with so many other countries.

European Union member states, Japan, Australia, Canada, New Zealand, the United Kingdom and South Korea have joined the United States in imposing their own restrictions. And governments including Singapore and Taiwan, a major global semiconductor producer, have signaled they will support the rules.

“Because we have full cooperation and alignment with so many countries, it makes enforcement so much easier,” Gina Raimondo, U.S. Secretary of Commerce, said in an interview. “Each country will enforce the law.”

“It’s part of the power, if you will, to have so much collaboration,” she added.

Officials with the Commerce Department, responsible for enforcing U.S. rules, have already begun rummaging through shipping containers and detaining electronics, aircraft parts and other goods destined for Russia. On March 2, federal agents stopped two speedboats at the Port of Charleston worth $150,000 that were being exported to Russia, according to senior US officials.

To search for possible violators, federal agents will comb through advice from industry sources and work with Customs and Border Protection to find anomalies in export data that could indicate shipments to Russia. . They are also contacting known exporters to Russia to get them to agree to the new restrictions, reaching out to about 20 or 30 companies a day, U.S. officials said.

Their efforts extend beyond US borders. On March 3, Commerce officials spoke to a gathering of 300 businessmen in Beijing about how to comply with the new restrictions. U.S. officials have also been coordinating with other governments to ensure they take a strong stance on enforcement, senior U.S. officials said.

Emily Kilcrease, director of the energy, economy and security program at the Center for a New American Security, said the level of allied cooperation in implementing export controls had been “completely unprecedented” and that international coordination would have a significant advantage.

“Allied nations will be active partners in enforcement efforts, rather than the United States attempting to enforce its own unilateral rules extraterritorially,” she said.

It remains to be seen how effective the rules are in degrading Russian military capability or deterring its aggression against Ukraine. But in their original form, the broad scope of the measures looks like a victory for the multilateralism that President Biden promised to restore.

Mr Biden entered office pledging to mend ties with Europe and other allies that had been alienated by former President Donald J. Trump’s “America First” approach. A key part of the argument was that the United States could put more pressure on countries like China when it wasn’t acting alone.

This approach has been particularly important for export controls, which experts say can do more harm than good when imposed by a single country – a criticism that has sometimes been leveled at export controls. export that the Trump administration imposed on China.

The Russian invasion of Ukraine united Western governments like few things before. But even with countries keen to penalize Russia, coordinating restrictions on a wide range of complex technologies among more than 30 governments has not been straightforward. The Commerce Department had more than 50 discussions with officials from other countries between late January and Feb. 24, when the controls were announced, as they worked out the details, senior U.S. officials said.

Much of that effort fell to Matthew S. Borman, a Commerce Department employee for three decades, 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 for meetings with Peter Sandler, the European general manager for trade, and other staff. As a ‘freedom convoy’ protesting coronavirus restrictions attempted to enter Brussels, they worked from early morning until late at night amid reams of paper and spreadsheets of tech descriptions complex.

Each country had its own Byzantine regulations and its own interests to consider. The European Commission has had to consult with its 27 member countries, especially tech powerhouses like Germany, France, the Netherlands and Finland, over which products 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 a neighbor of Russia, the Europeans wanted to ensure that Russia could still access certain assets for public safety, such as nuclear reactor components to avoid a Chernobyl-like meltdown. At least one foreign country has insisted that auto exports to Russia continue, a senior administration official said.

The breakthrough came when US officials offered a compromise. The Biden administration planned to issue a rule prohibiting companies around the world, even outside the United States, from exporting certain products to Russia if they were made using American technology. But those measures would not apply to countries that have joined the United States and Europe in imposing their own tech restrictions on Russia.

In an interview, Borman said US allies have historically been concerned about the extraterritorial reach of US export controls, and that exclusions for countries that imposed their own rules “really were the key piece.”

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

The rules now prevent companies from around the world from sending high-tech products such as chips, telecommunications equipment and navigation equipment to Russia. They are even harsher for certain entities linked to the Russian army, which cannot import even a pencil or a toothbrush.

Ms Raimondo said the impact of the measures would likely be felt over a period of months, rather than weeks, as Russian tanks and planes are destroyed and checks prevent the Russian military from obtaining equipment for repair them. Over time, she said, the restrictions are expected to prove “very disabling for their military.”

While some companies might want to continue supplying parts to Russia in violation of those rules, there are powerful incentives not to do so, U.S. officials said, including detention of goods, fines and even prison sentences. jail.

The Commerce Department currently has 130 federal agents working in 30 cities across the United States to verify violators, as well as nine employees overseas. It plans to add staff in Europe and Asia to carry out more extensive checks, officials said.

Kevin Wolf, international business partner at Akin Gump and a former Commerce Department official, said implementing the policy would likely be “extraordinarily complex,” but it would immediately change company behavior.

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

“Just because people are speeding doesn’t mean you don’t have a speed limit,” he added.

One potential target is China, which has expressed an ominous allegiance to Russia. But Chinese leaders have also hinted that they will abide by the sanctions to protect their own economic interests.

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

“They have their own interest in not supplying this stuff to Russia,” she added.

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

China has denied this information. Jen Psaki, the White House press secretary, said Monday that she was unable to confirm any information, but that Mr. Sullivan had indicated that if China provides military or other assistance that violates sanctions or supported the war effort “there will be significant consequences”. .”

“But in terms of the details, we would coordinate with our partners and allies to make that decision,” she added.

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