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Imran Khan's party urges IMF to audit Pakistan elections before new bailout talks

Imran Khan's party urges IMF to audit Pakistan elections before new bailout talks
Imran Khan's party urges IMF to audit Pakistan elections before new bailout talks

 


WASHINGTON — U.S. semiconductor companies need to step up oversight of their foreign partners and work more closely with government and investigative groups, a panel told the Senate Homeland Security and Governmental Affairs Committee , saying that outsourcing production overseas has made it easier to track chip sales. more difficult, allowing Russia and other adversaries to circumvent sanctions.

U.S. semiconductor companies largely produce their chips in China and other Asian countries, from where they are then distributed around the world, making it difficult to know exactly who is buying their products, the companies said. experts to the commission during a hearing in Washington on February 27.

The United States and the European Union imposed drastic technological sanctions on Russia in order to weaken its ability to wage war following its full-scale invasion of Ukraine in February 2022. Russia's military-industrial complex relies heavily of Western technology, notably semiconductors, for the production of sophisticated weapons.

Western companies design chips made by specialized factories in other countries and sell them by the millions, with little visibility into the supply chain of their products beyond one or two levels of distribution, Damien Spleeters, deputy director of operations at Conflict Armament Research, told senators.

He added that if manufacturers required point-of-sale data from distributors, it would significantly improve their ability to trace the path of semiconductors recovered from Russian weapons and thus identify supply networks that circumvent sanctions.

Banned Western chips would be transported to Russia via networks in China, Turkey, Central Asia and the Caucasus.

Spleeters said it discovered a Chinese company diverting millions of dollars of components to sanctioned Russian companies by working with U.S. companies whose chips were found in Russian weapons.

This company was sanctioned earlier this month by the United States.

“It’s going to be a bolt from the blue”

The commission is examining several U.S. chip companies whose products have been found in Russian weapons, said Sen. Richard Blumenthal (D-Connecticut), adding that those companies know or should know where their components go.

Spleeters rejected the idea that Russia would buy chips from household appliances such as washing machines or from large online shopping sites.

“We have not seen any evidence that chips were ripped off and then reused for this purpose,” he said.

It doesn't make sense for Russia to buy a $500 washing machine for a $1 coin that it could get more easily, Spleeters added.

In his opening statement, Senator Ron Johnson (Republican of Wisconsin) said he doubted any of the solutions proposed by experts would work, pointing out that Russia was increasing its weapons production despite draconian sanctions.

You plug a hole, another hole will open, it will be real crazy. So this is a reality that we have to face, Johnson said.

Last year, Russia imported $1.7 billion worth of foreign-made microchips despite international sanctions, Bloomberg reported last month, citing classified data from Russian customs services.

Johnson also expressed concern that sanctions would harm Western nations and businesses.

My guess is they're just going to get more and more sophisticated at evading sanctions and finding components, or potentially finding other suppliers… like Huawei, Johnson said.

Huawei is a leading Chinese technology company that produces, among other products, chips.

James Byrne, founder and director of the Royal United Services Institute's open source intelligence and analysis group, said officials and businesses should not give up trying to track chips just because it is difficult.

“Shocking” dependence on Western technology

He said the West has leverage because Russia is highly dependent on Western technology for its arms industry.

Modern weapon platforms cannot function without these elements. They are the brains behind almost all modern weapons platforms, Byrne said.

These semiconductors vary in sophistication and importance, but it is fair to say that without them, Russia would not have been able to support its war effort, he said.

Byrne said the scale of reliance on Western technology – which goes beyond semiconductors to include carbon fiber, polymers, lenses and cameras – was truly shocking given of the Kremlin's rhetoric on import substitution and independence.

Elina Ribakova, a Russia expert and economist at the Peterson Institute for International Economics, said an analysis of 2,800 components from Russian weapons collected in Ukraine showed that 95 percent came from countries allied with Ukraine, the vast majority coming from the United States. However, the sample may not be representative of the actual distribution of component origin.

Ribakova warned that Russia was accelerating imports of semiconductor machine components in case the United States imposed such export controls on China.

China can legally purchase advanced Western components for semiconductor manufacturing equipment and use them to make and sell advanced semiconductors to Russia, said Senator Margaret Hassan (D-New Hampshire).

Ribakova said the manufacturing components would potentially allow Russia to isolate itself a little longer.

Ribakova said tech companies are reluctant to beef up their compliance divisions because it can be costly. She recommended that the United States toughen sanctions for non-compliance because the effects would be felt beyond aid to Ukraine.

The credibility of our entire system of economic governance is also at stake. Malicious actors around the world are wondering if they will be credible or if it is just words written down, she said.

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