The United States launches a global network to stop shipments to Russia

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The United States launches a global network to stop shipments to Russia

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WASHINGTON – The United States, in partnership with its allies, has hit Russia with some of the most radical export restrictions ever imposed, preventing companies around the world from sending advanced technology to penalize President Vladimir V. Putin for his invasion of Ukraine.

The restrictions are aimed at disrupting the flow of semiconductors, aircraft components and other technologies that are crucial to Russia’s defense, maritime and aerospace industries, in an attempt to cripple Putin’s ability to wage war. But the extent to which the measures actually hamper Russia’s capabilities will depend on whether companies around the world follow the rules.

Enforcing the new restrictions poses a significant challenge as governments seek to control thousands of companies around the world. But the task could be simplified because the United States acts in concert with so many other countries.

The member states of the European Union, Japan, Australia, Canada, New Zealand, the United Kingdom and South Korea have joined the United States in imposing their restrictions. And governments, including Singapore and Taiwan, one of the world’s leading semiconductor manufacturers, have indicated they will support the rules.

“Because we have full cooperation and alignment with so many countries, it makes application so much easier,” Gina Raimondo, US Secretary of Commerce, said in an interview. “Each country will apply”.

“This is part of the power, if you will, to have so much collaboration,” he added.

Officials from the Commerce Department, which is tasked with enforcing US rules, have already begun digging into shipping containers and holding electronic devices, aircraft parts and other goods destined for Russia. On March 2, federal agents arrested two speedboats at Charleston port worth $ 150,000 that were being exported to Russia, according to senior US officials.

To look for any offenders, federal agents will review suggestions from industry sources and work with customs and border protection to find anomalies in export data that could indicate shipments to Russia. They are also reaching out to well-known exporters in Russia to get them involved with the new restrictions, talking to about 20 to 30 companies a day, US officials said.

Their efforts extend beyond the borders of the United States. On March 3, trade officials spoke to a gathering of 300 businessmen in Beijing about how to comply with the new restrictions. US officials have also coordinated with other governments to ensure they take a tough stance on enforcement, senior US officials said.

Emily Kilcrease, program director for energy, economics and security at the Center for a New American Security, said the level of Allied cooperation in establishing export controls was “completely unprecedented” and that international coordination would have an important advantage.

“Allied countries will be active partners in law enforcement efforts, rather than the United States attempting to enforce its unilateral rules extraterritorially,” he said.

It remains to be seen how effective the rules are in degrading Russian military capability or in deterring its aggression against Ukraine. But in their initial form, the broad scope of the measures seems like a victory for the multilateralism President Biden has promised to restore.

Biden took office by pledging to mend ties with Europe and other allies who had been alienated from former President Donald J. Trump’s “America first” approach. A key part of the argument was that the US could have put more pressure on countries like China when it wasn’t acting alone.

This approach has been particularly important for export controls, which experts say can do more harm than good when enforced by just one country, a criticism that has sometimes been leveled at the export controls the Trump administration has issued on the country. China.

The Russian invasion of Ukraine unified Western governments like few things before. But even with countries keen to penalize Russia, coordinating restrictions on a wide range of complex technologies across more than 30 governments hasn’t been easy. The Commerce Department held more than 50 discussions with officials from other countries between the end of January and February 20. On the 24th, when the checks were announced, while they cleared the details, senior US officials said.

Much of this effort went to Matthew S. Borman, a three-decade employee of the Department of Commerce, who had almost daily conversations with the European Commission and other countries at the end of January.

In mid-February, Mr. Borman and a senior aerospace engineer flew to Brussels for meetings with Peter Sandler, the European trade director general, and other staff. While a “convoy of freedom” protesting coronavirus restrictions attempted to arrive in Brussels, they worked from early morning until late at night amidst reams of paper and spreadsheets of complex technological descriptions.

Each country had its own Byzantine regulations and interests to consider. The European Commission had to consult with its 27 member countries, especially tech powers such as Germany, France, the Netherlands and Finland, on which products could be cut. Officials debated whether to crack down on the Russian oil industry at a time of rising gas prices and inflation.

As Russia’s neighbors, Europeans wanted to ensure that Russia still had access to certain public safety assets, such as nuclear reactor components to avoid a Chernobyl-style meltdown. At least one foreign country has insisted that auto exports to Russia should continue, a senior administration official said.

The breakthrough came when American officials offered a compromise. The Biden administration planned to enact a rule that prevented companies around the world, even outside the United States, from exporting certain products to Russia if they were made using American technology. But those measures would not apply in countries that joined the United States and Europe in issuing their own technological restrictions to Russia.

In an interview, Borman said that American allies had historically been concerned about the extraterritorial scope of US export controls and that exclusions for countries that enforced their own rules “were really the key piece.”

“We all realized that at a strategic level the most important thing was to have a unified allied position,” he said.

The rules now prevent companies around the world from sending high-tech goods such as chips, telecommunications items, and navigation equipment to Russia. They are even more difficult for some entities with ties to the Russian military, who cannot even import a pencil or toothbrush.

Ms. Raimondo said the impact of the measures is likely to be felt over a period of months, rather than weeks, as Russian tanks and planes are destroyed and controls prevent the Russian military from obtaining materials to repair them. Over time, she said, the restrictions should prove “very disabling for their military”.

While some companies may want to continue supplying parts to Russia in violation of those rules, there are powerful incentives against this, US officials said, including detention of goods, fines and even jail time.

The Department of Commerce currently has 130 federal agents working in 30 US cities to check for offenders, as well as nine employees overseas. It plans to add staff in Europe and Asia to carry out more extensive checks, officials said.

Kevin Wolf, Akin Gump’s international business partner and former Commerce Department official, said implementing the policy would likely be “extraordinarily complex,” but it would immediately alter the company’s behavior.

“While they’re not perfect, I still think you’ll see a significant reaction from multinationals in doing everything they can to comply,” said Wolf.

“Just because people’s speed doesn’t mean you don’t have a speed limit,” he added.

A potential target is China, which has expressed worrying loyalty to Russia. But Chinese leaders have also hinted that they will respect sanctions to protect their own economic interests.

Ms. Raimondo warned that the United States could take “devastating” action against Chinese companies that violate the policy by cutting them out of the US technology and equipment needed to make their products.

“They have a vested interest in not supplying this stuff to Russia,” he added.

National Security Advisor Jake Sullivan met with Chinese foreign affairs official Yang Jiechi in Rome on Monday to discuss reports that Russia has asked China for economic and military assistance for its war in Ukraine.

China has denied such reports. Jen Psaki, the White House press secretary, said on Monday that she was unable to confirm any information, but that Mr. Sullivan had communicated that if China provided military or other assistance it violated sanctions or had supported the war effort “there would be significant consequences.”

“But in terms of what the specs look like, we will coordinate with our partners and allies to make that determination,” he added.

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