Russia-Ukraine War | Electronic products shipped to Russia via Hong Kong have dropped significantly, and the effect of sanctions is evident

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go through Yijie Technology July 22, 2024

According to Reuters, citing people familiar with the matter, between January and May, the volume of common high priority items (CHPL), such as advanced components and microelectronics, transiting through Hong Kong fell by 28%. These items are considered by the United States and the European Union to be potentially used in the war between Russia and Ukraine.

According to undisclosed data from the U.S. Department of Commerce disclosed by Reuters for the first time, the volume of semiconductors and other restricted goods shipped to Russia via China and Hong Kong has dropped by about 20% this year; during the same period, the volume of such goods transiting through mainland China (excluding Hong Kong) has also dropped by 19%. The data shows that Hong Kong remains one of the hotspots for circumventing sanctions worldwide.

The people also said that the U.S. Department of Commerce referred to its previous statements, emphasizing efforts to restrict Russia’s access to technology and other items to continue its war in Ukraine. The U.S. government sees Hong Kong and China as important nodes for Russia to obtain military materials, including semiconductors and drone parts; however, the people said that the United States is optimistic about being able to slow down this trade, but China remains our biggest concern. “The reduction in illegal flows is due to a variety of factors, including active enforcement by U.S. authorities and engagement with companies involved in transshipment.”

Since the Russo-Japanese War, the United States and its allies have accused China of supporting Russia’s war in Ukraine by exporting parts and equipment needed by weapons manufacturers. The U.S. State Department and Treasury Department have imposed multiple rounds of sanctions on entities around the world with commercial ties to the Russian military, including its Hong Kong shell company “found to be transferring semiconductors.”