US elements present in Russian, Iranian army gear

Following the country’s military invasion of Ukraine last February, Western companies were quick to shut down operations in Russia. But US and European microelectronics continue to fuel the Kremlin’s war.

According to research by the British scientific journal Royal United Services Institute, key components from more than a dozen Western countries have been found in military equipment used by Russian forces in Ukraine. A separate report by the independent research group Conflict Armament Research analyzed the components of four Iranian-made drones, also known as unmanned aerial vehicles, deployed by Russia in Ukraine, and found that the vast majority of the technological equipment was made by US companies originates.

The two reports show how decades of multi-billion dollar military modernization programs in Iran and Russia have depended on US-company semiconductors. The research questions the two countries’ domestic microelectronics manufacturing capabilities and reveals illegal procurement and misuse of semiconductors by foreign companies.

“With Russian systems, I think we have a little over 50% of the components branded by US-based companies,” said Damien Spleeters, CAR’s deputy operations manager. “For Iranian systems, it’s more than 80 percent.”

Qaem-5 precision guided munitions documented by Conflict Armament Research in Ukraine.

Source: Conflict Arms Research

Spleeters said he has personally traveled to Ukraine seven times to study and trace the sources of supply of microelectronics used in advanced weapons such as Iranian-made drones.

“Using just screwdrivers and wrenches and whatnot, we open up these systems and take them apart to access each individual component,” Spleeters said.

He and his colleagues take thousands of photos of the parts before reassembling the gun in a process he likened to “an IKEA system.”

Russia’s procurement of equipment, such as UAV drones from Iran, “underscores the challenges” the country faces “to replace equipment lost or depleted since Russia’s full-scale invasion of Ukraine began.” according to RUSI researchers.

Shahed-131 UAV documented by Conflict Armament Research in Ukraine.

Source: Conflict Arms Research

About 70% of the 450 components RUSI examined from more than 27 different weapon systems, platforms, radios and equipment were manufactured by US companies.

Almost half of the components came from Analog Devices, Texas Instruments, microchip technology, All of them, intelXilinx (recently acquired from AMD) and Cypress Semiconductor (now owned by Deutschlands Infineon Tech). According to RUSI’s report, products from Analog Devices and Texas Instruments were the most widely used in weapons systems.

All of these US-listed companies told CNBC that they have halted shipments of goods to Russia, Belarus and the Russian-occupied territories of Ukraine, in accordance with US restrictions.

Trade Restrictions

The US and Iran have decades of history of trade restrictions.

The current economic sanctions restricting imports and exports between the two countries were first imposed in 2012. They have been updated several times over the years and ban almost every type of exchange of goods and services except those intended for humanitarian aid and information services. Even these exempt categories still require a special license from the Department of Commerce’s Bureau of Industry and Safety.

While many of the harshest sanctions against Russia only began after Ukraine’s February 2022 invasion, many exports to the country had been restricted since at least 2014, when Russia first violated Ukraine’s sovereignty by annexing the country’s eastern peninsula, Crimea .

In the nearly decade since, American semiconductor components have still found their way into Russian weapons.

A date mark on a Qaem-5 munition documented by investigators from Conflict Armament Research in Ukraine.

Source: Conflict Arms Research

“With the Russian systems, we see that many of these components were made between 2014 and 2021. And with the Iranian systems, we found a lot of components that were made in 2021, 2020, and then we also have some components that were made in 2022,” said CARs Spleeters.

The more recent bits show how Iran and Russia may have circumvented US restrictions, according to CAR and RUSI analyses.

Even more annoying, according to this research, some of the discovered components are classified as dual-use items with so-called Export Control Classification Numbers on the Trade Control List. This means a chip can be legally sold into one country for consumer or commercial use, only to be resold to a company in another country in the secondary market for military use. This type of rerouting of goods is called transshipment, and it causes three problems, according to industry experts.

First, it is more difficult for manufacturers and governments to track down end users, and second, this raises questions about the effectiveness of existing export controls, as many of these products are more recently manufactured and would be subject to more stringent regulations. Furthermore, it underscores that a total ban is unlikely to be achievable given the dual use of certain chips needed for commercial products.

Circuit boards from four different pieces of Russian military equipment found in Ukraine by investigators from Conflict Armament Research.

Source: Conflict Arms Research

All seven US chipmakers contacted by CNBC condemned the unauthorized diversion of their products to countries such as Russia and Iran.

A spokesman for AMD said the company will take “immediate action under our contractual terms” if any of its products are found to be sold into these countries or regions.

Onsemi called export control violations a “material violation” and said they “may result in the termination of our contractual relationship with business partners.”

Texas Instruments said it does not “support or condone” the use of its products “in applications for which they were not designed.”

A spokesman for Intel said, “We don’t always know nor can we control what products our customers can build or what applications end users can build,” but stressed that the chipmaker “does not support or tolerate our products being used in violation of human rights.” become. “

Analog Devices said it takes unintentional misuse of its products “very seriously” and is increasing efforts to address these issues by “implementing enhanced monitoring and auditing processes and taking enforcement action where necessary.”

Microchip Technology said it uses “various methods, including screening customers against blacklists,” to prevent illegal use of its products.

And Infineon said it has directed global channel partners to “prevent shipments and take measures preventing any diversion of Infineon products or services in violation of the sanctions,” adding that it has reiterated that position “multiple times.”

accountability

Although the semiconductor companies and government officials spoke to CNBC to acknowledge that the unauthorized use of American chips is a serious problem, experts can’t agree on who is responsible.

“I don’t think most of the bad behavior is with the manufacturer… It’s the end buyers that I think you have the real problem with,” said Rep. Jim Himes, D-Conn., the senior member of the House Permanent Select Committee on Intelligence.

“I think our supply chains are really that fundamentally weak,” said Nazak Nikakhtar, a partner at law firm Wiley Rein and a former assistant secretary for industry and analysis at the International Trade Administration. “What I see all too often is companies just saying, ‘That’s not my problem. I have a good compliance mechanism. This is someone else’s fault.’”

Others, however, blame a lack of government oversight for what they say.

“For too long, the Commerce Department has been lax about export controls, sending critical supplies like chips to third parties it knows will reverse these materials and sell them to opposing militaries. This has to end,” said Sen. Tom Cotton, R-Ark, who serves on the Senate Intelligence Committee. “We should deny export licenses to companies we even suspect are helping our enemies circumvent US sanctions.”

Electronic components documented by investigators from Conflict Armament Research in Ukraine.

Source: Conflict Arms Research

A spokesman for the Department of Commerce said its officials are aware of the problem of handling microelectronics and other goods. In response to the war in Ukraine, the ministry formed a so-called “Global Export Control Coalition” consisting of 38 international partners, many of whom were important trading partners of Russia before the invasion of Ukraine.

The group’s purpose is to siphon off Russia’s access to many commodities by imposing the same level of trade restrictions across the group.

“We are in constant communication with our allies and our interagency partners. We’re constantly following up as much as we can, using every source of information we have access to to try and get ahead of the game and shut down as many illegal networks as we can,” the department spokesman said.

Greater cooperation from US allies could help reduce the extent to which these components end up in the hands of bad actors, Nikakhtar said.

“Allies’ commitment to issuing press releases and declaring intent to do something is one thing, but really, the gum has to fit the road. Allies need to overhaul their system to ensure the technologies are not exported,” she said. “And the United States must lead.”

Correction: Conflict Armament Research is an independent research group. A previous version of this story mischaracterized the organization.

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