Fresh EU sanctions hit Russian IT firms
More stringent restrictions on 'advanced' tech items
The European Union last week adopted its 11th package of sanctions targeting Russia over its illegal invasion of Ukraine, aiming to prevent other nations and companies from evading restrictions.
There is potential for the EU to use its latest round of sanctions against goods going to other countries as well. The intent is to stop the flow of sanctioned materials reaching Russia via states acting as transit points.
An additional 87 businesses have been subjected to more stringent export restrictions for advanced technology items and goods with "dual-use" potential - that is, ones that can be used in both military and civilian applications.
Among the newly sanctioned entities are three companies from Hong Kong, two from the United Arab Emirates, two from Uzbekistan, one from Syria, one from Armenia and one from Iran.
These companies are suspected of aiding the Kremlin in obtaining prohibited goods that are part of the blacklist.
Uptick in EU goods to Russian allies
Brussels has noticed a significant and "unusual" increase in the export of EU-manufactured goods to nations geographically near Russia, or politically aligned with the Kremlin.
Most products encompass machine parts, semiconductors, valves, cranes, chemicals and even everyday household appliances like microwaves, dishwashers, and freezers.
These specific items are explicitly prohibited in trade between the EU and Russia.
Russian IT feels the pinch
Following an evaluation by the European Council, numerous IT companies have been included in the list of sanctioned entities.
The EU has also introduced a new listing criterion that enables the designation of individuals and entities operating within the Russian IT sector and possessing a license from the Federal Security Service of the Russian Federation (FSB) or the Russian Ministry of Industry and Trade.
"Companies in the IT sector that provide critical technology and software to the Russian intelligence community hold a licence from the Federal Security Service of the Russian Federation (FSB), which enables them to work with information at the Russian security level of 'state secret'," the European Council noted.
"Additionally, such companies often hold a particular 'weapons and military equipment' license administered by the Russian Ministry of Industry and Trade.
"The Council therefore considers that the criteria for designation should be extended in order to cover legal persons, entities, or bodies operating in the Russian IT sector that hold a license administered by the FSB Center for Licensing, Certification, and Protection of State Secrets or a 'weapons and military equipment' license administered by the Russian Ministry of Industry and Trade."
We have contacted the European Commission for a list of sanctioned Russian IT firms and will update this article when we receive a reply.
Crackdown on sanction circumventions
Certain companies have been seen selling the production rights of sanctioned goods to Russia as an alternative to direct sales.
In response, the EU has taken action by prohibiting the sale, licensing, transfer, or referral of IP rights to Russia.
This measure specifically applies to the manufacturing of sanctioned goods outside the EU.
Additionally, the EU has implemented a ban on the transit of specific sensitive goods, such as advanced technology or aviation-related materials, which are exported from the EU to third countries, via Russia.
The export of all electric and hybrid vehicles has been prohibited, alongside the restriction on exporting cars equipped with engines measuring 1,900cm³ or larger.
"The EU stands united in its solidarity with Ukraine, and will continue to support Ukraine and its people together with its international partners, including through additional political, financial, military and humanitarian support for as long as necessary," the European Council said.