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US cracks down on Russian use of US tech

by on25 February 2022

Well not Apple gear, you can still have that if you can afford it 

The United States restricted exports to Russia of a broad set of US-made products as well as foreign-produced goods built with US technology, following the invasion of Ukraine.

Here is how the rules are expected to affect US tech companies, according to six experts on US trade law.

US companies must now obtain licenses to sell computers, sensors, lasers, navigation tools, telecommunications, aerospace, and marine equipment. The United States has made it clear that they are wasting their time as they will deny almost all requests.

A similar restriction was first applied in recent years to companies shipping to Chinese technology giant Huawei, to great effect. The response was that the Chinese decided it was better to develop their own technology and be free of the shackles of US companies. While they are no way there yet, it will only be a matter of time and it would appear that Russia will be a willing buyer if the embargos continue.

Meanwhile, many companies may opt to suspend all sales to Russia out of caution, legal experts said. Dan Goren, partner at law firm Wiggin and Dana, said a client that makes electronic equipment had already held shipments to a Russian distributor on Thursday.

US exports to Russia were limited to about $6.4 billion last year, US census data show, with machinery and vehicles among big categories in past years.

The Semiconductor Industry Association (SIA), which represents US chipmakers, noted that "Russia is not a significant direct consumer of semiconductors" and that Russia's communications and tech spending "totalled only about $25 billion out of the multi-trillion global market" in 2019.

But many products made in Asia and destined for Russia include chips made with U.S. tooling. Over two dozen members of the European Union, as well as the United Kingdom, Canada, Japan, Australia and New Zealand, are imposing similar export restrictions to limit Russia's options.

Emily Kilcrease, senior fellow at the Center for a New American Security and former deputy assistant US Trade Representative, said the restrictions will freeze Russia's technology where it is today.

"You won’t be able to get new tech into the country," she said.

The curbs and sanctions are not as comprehensive as US trade actions on Iran and North Korea, but they could have bigger consequences globally because Russia is more intertwined with the world economy, attorneys said.

From a consumer perspective the sanctions will not hurt Russia at all. Russians will still be able to buy household electronics, humanitarian goods, and technology necessary for flight safety. Mobile phones are permitted as long as they are not sold to Russian government employees or certain affiliates.

Also not restricted are consumer encryption technologies, which one attorney described as a sign that the United States and its allies do not want to disrupt protesters and media.


Last modified on 27 February 2022
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