After the start of the military operation in Ukraine, semiconductors from Japanese manufacturers continue to flow to Russia: most transactions are carried out via third countries (for example, China) and Japanese laws on the direct export cannot block them. “More measures are needed to stop this flow of goods and make sanctions more effective,” writing Nikkei Trade Publication.
Japan joined US sanctions against the supply of semiconductors to Russia in March 2022. The restrictions were introduced in stages depending on product characteristics and other factors, but in general, as explained by a official of the Japanese Ministry of Economy, Trade and Industry, “semiconductors have been subject to the rules from the start”.
Nikkei editors received Russian customs data from Indian research firm Export Genius and studied semiconductor import records from February 24, 2022 to March 31, 2023. Shipments included therein included at least 2 million of units for a total amount of approximately 11 million dollars, with China and Hong Kong taking the first place in terms of volume (70%). The top three also included South Korea and Turkey.
In April, the Nikkei reported that US-made semiconductors, whose shipment to Russia had been banned by the US government, were entering Russia through trading companies in Hong Kong and elsewhere. At the same time, the publication pointed out that while US sanctions laws allow third countries to be held liable for their violation, then in Japan the legislation only applies to direct exports.
Japanese customs statistics show that in 2022, the country exported 150,000 semiconductors to Russia, down 85% from a year earlier. In October 2022, a Hong Kong-based trading company delivered around 4,000 semiconductors made by Japan’s Kioxia Holdings to Russia for around $170,000. “The share of the Russian company that received these semiconductors belonged to someone connected with the production of weapons,” Nikkei pointed out, citing Ukraine’s findings.
Kioxia acknowledged that its products are subject to export controls and said it “requires its distributors to comply with each country’s export regulations.” The company added that “it has not been possible to confirm a single case of receipt of products in Russia.”
In March 2022, the Chinese company King-Pai Technology shipped $150,000 worth of semiconductors from another Japanese manufacturer to a Russian trading company. In June of the same year, King-Pai was sanctioned by the US Department of Commerce for doing business with a Russian military company.
At the G7 summit in May, G7 leaders pledged to take action against export restrictions. European Council President Charles Michel said: “Now we are focused on closing all the loopholes.” At the same time, Nikkei acknowledges that establishing control over the complex supply chains of Japanese semiconductor exports will be a test for the country’s authorities.
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