US widens Russia sanctions, targets semiconductors sent via China

WASHINGTON – The United States on June 12 dramatically broadened sanctions on Russia, including by targeting China-based companies selling semiconductors to Moscow, as part of its effort to undercut Russia’s war on Ukraine.

Among the steps, the US Treasury said it was raising “the risk of secondary sanctions for foreign financial institutions that deal with Russia’s war economy”, effectively threatening these institutions with losing access to the US financial system.

It also said it was moving to restrict the Russian military industrial base’s ability to exploit certain US software and information technology services and, with the State Department, targeting more than 300 individuals and entities in Russia and beyond, including in Asia, Europe and Africa.

Separately, the Commerce Department said it was targeting shell companies in Hong Kong for diverting semiconductors to Russia, taking steps that would affect nearly US$100 million (S$134 million) of high-priority items for Moscow, including such chips.

“Today’s actions strike at their remaining avenues for international materials and equipment, including their reliance on critical supplies from third countries,” Treasury Secretary Janet Yellen said in a statement.

“We are increasing the risk for financial institutions dealing with Russia’s war economy and eliminating paths for evasion, and diminishing Russia’s ability to benefit from access to foreign technology, equipment, software, and IT services,” she said.

“Every day, Russia continues to mortgage its future to sustain its unjust war of choice against Ukraine.”

The news came as US President Joe Biden departed early on June 12 for

a summit in southern Italy

with leaders from other Group of Seven (G-7) democracies.

One of the top priorities for the G-7 leaders is boosting support for Ukraine, now in the third year of resisting Russia's invasion, and disarming Russia. REUTERS