Trade and commodity controls are a critical component within the global trade framework to counter the proliferation of WMD, conventional weapons, and sensitive technologies. Businesses should have a strong understanding of these controls and illicit procurement patterns to mitigate their exposure to potential criminal infractions, civil penalties, and harm to their reputation.
The BITE AI platform includes hundreds of millions of worldwide trade transactions that are ingested, transformed, and enriched with indicators of illicit trade. Each month, the BITE team of enforcement SMEs and IT specialists conduct analysis of BITE trade data with a focus on the various cross-border violations related to international trade. In October 2023, the BITE team analyzed Russian imports from China, which revealed several Russian procurement patterns for dual-use items necessary for its military-industrial sector. This report demonstrates Russia is using China as a transshipment country to obtain high-priority battlefield items, including many U.S-origin brands.
The total declared value of US-origin products in Russian imports from China - post-Ukrainian invasion through the end of 2022 - was over $56 million, with 13.5% of the US-origin products classified as high-priority battlefield items.
Within the trade community, including manufacturers, shippers, consignees, and other entities engaged in the global supply chain, it is important to exercise a "reasonable care" standard when vetting their transactions to ensure compliance and prevent potential legal/regulatory violations. This report will assist companies seeking to avoid the transshipment of their products to Russian military end-users by identifying products, companies, and intermediaries transshiping high-priority battlefield items through China to Russia.
Governments worldwide impose stringent laws and regulations governing the export of controlled commodities, technologies, and services for strategic trade purposes. These items may include military or dual-use goods with potential applications in weapons of mass destruction (WMD) or conventional military weapons. The ultimate destinations may encompass sanctioned regions like Iran, North Korea, or Russia and individuals subject to sanctions, such as Russian oligarchs or individuals involved in narcotics trafficking.
The BITE AI Platform includes millions of worldwide trade transactions that are ingested, transformed, and enriched with indicators of illicit trade and anomalies. This month, our team analyzed trade data with a focus on Russian imports from China with particular attention on US-origin products and changes in trade behavior before and after Russia’s February 24, 2022, invasion of Ukraine.
This article provides insights into the patterns of trade from China to Russia. These patterns are of particular interest since Russia invaded Ukraine, as many new Russian entities have been sanctioned by the US and other countries post-invasion. The same cannot be said for Chinese entities which supply sanctioned Russian entities. Goods and commodities continue to move from China to Russia, and companies involved in the trade of goods and commodities to China should be aware of these patterns of transshipment.
The table below shows the change in the number of shipments from major ports in China to Russia between 2021 and 2023.
The percentage of overall Russian imports from China grows from 9.8% in 2021 to 16% in 2023, an almost 70% increase. The total value of Russian imports from major Chinese ports in the first seven months of 2023 was over 20 billion USD.
The BITE Team reviewed US-origin commodities shipped from China to Russia, identifying hundreds of US-origin brands and products including products going to sanctioned Russian entities.
The table below shows the total transactions and value associated with US brands being shipped from China to Russia.
BITE identified the top three US brands, by transaction count, being shipped from major ports in China to Russia since 2022: TEXAS INSTRUMENTS, VISHAY, and ANALOG DEVICES.
Since March 2022, the top three US brands, by dollar value, being shipped from major ports in China to Russia are GENERAL ELECTRIC, GOODYEAR TIRE & RUBBER COMPANY, and DELL.
The European Union recently published a list of high-priority battlefield items. According to the EU, “The European Commission services, in coordination with the competent authorities in the US, the UK and Japan, have identified a number of prohibited dual-use goods and advanced technology items used in Russian military systems found on the battlefield in Ukraine or critical to the development, production or use of those Russian military systems. These items include electronic components such as integrated circuits and radio frequency transceiver modules, as well as items essential for the manufacturing and testing of the electronic components of the printed circuit boards retrieved from the battlefield.”
The BITE team refined its data analysis of Russian imports to identify transactions for high-priority battlefield items. The graph below shows the growth in shipments of high-priority battlefield items over time.
The donut chart below shows the top ten high-priority battlefield items by Harmonized System of Codes.
Furthermore, the table below identifies the numbers and values of transactions associated with high-priority battlefield items.
One significant hit is a transaction valued at $1,559,600 from Guahnzhou Vimana Trading (China) to BTC Trade in Russia, which was a shipment of Dell products described as storage devices and servers.
Additional insights were gathered when investigating the Russian consignees. Multiple Russian consignees of shipments from China to Russia of US brands are sanctioned by the United States and other countries.
In May 2023, OFAC listed KVAZAR OOO as a sanctioned entity. Between June 1 and July 31, 2023, following its listing, BITE trade data shows 66 shipments of US-origin products from China to KVAZAR OOO. The US producers include AMPHENOL CORPORATION, VISHAY INTERTECHNOLOGY, INC., AVAGO TECHNOLOGIES, LINEAR TECHNOLOGIES, INC., MAXIM INTEGRATED PRODUCTS, INC., MICROCHIP TECHNOLOGY INC., TEXAS INSTRUMENTS, ANALOG DEVICES INC, SEMICONDUCTOR COMPONENTS INDUSTRIES, LLC, ADESTO TECHNOLOGIES.
Additional sanctioned entities receiving US-origin products and the producers/brands connected to those transactions are available upon request.
US brands and producers should conduct due diligence on their exports to ensure that their products do not end up in the wrong hands. The insights in this article demonstrate how high-priority battlefield items produced in the United States still end up in the hands of sanctioned Russian entities. It's important to note that while numerous Russian entities face sanctions, there are relatively fewer Chinese entities subject to sanctions for trading with Russian entities.
In this article we provide further insight into our analysis of ROSOBORONEKSPORT’, a Russia’s only state-controlled intermediary in
In this month's edition, Nu Borders analyzed Russian import and export trade manifest data...
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