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The US announced sweeping restrictions on technology exports to Russia.

The Biden administration on Thursday announced a series of restrictions aimed at cutting off Russia’s access to foreign products such as semiconductors, computers, lasers and telecommunications equipment in response to the Ukraine invasion.

Measures, which analysts call important, will stop direct technology export from the United States to Russia, in an attempt to limit Russian industries including defense, aerospace, and maritime. They also go beyond previous sanctions enacted by the U.S. government by placing new limits on products manufactured outside the United States that use U.S. equipment or technology.

Under the new rules, high-tech goods manufactured abroad using U.S. machinery, software or blueprints cannot be exported to Russia — restrictions similar to the kind of sanctions restrictions the United States has imposed. Application period for Chinese telecommunications company Huawei in 2020.

“This will have a huge cost to the Russian economy, both immediately and over time,” Biden said.

“We have purposefully designed these sanctions to maximize the long-term impact on Russia and minimize the impact on the United States and our allies,” he said.

The Commerce Department, which announced the new restrictions, also added 49 Russian entities to its list of military suppliers that will face further restrictions on their access to foreign technology. . Companies can apply to the US government for permission to continue supplying goods to Russia, but they may be denied.

The rules appear to be designed to exempt consumer electronics, like dishwashers or smartphones. But they will affect the supply of products in many industries, including aircraft, avionics, telecommunications, marine, computers and microelectronics, said Kevin Wolf, commercial partner internationally by Akin Gump, who worked in export control during the Obama administration.

“This is not just optics,” said Mr. Wolf. “It will have a real, significant impact on these sectors of the Russian economy for many years.”

Allies in the European Union, Japan, Australia, the United Kingdom, Canada and New Zealand have all announced plans to impose similar restrictions on technology exports, White House officials said. know.

Emily Kilcrease, a senior fellow at the Center for a New American Security, said the new rules would likely usher in a period of immediate confusion and disruption, as companies try to figure out how to comply. Restrictions. But the real impact will be on Russia’s economy and military capabilities over time. As electronic equipment, aircraft and ships wear out, Russian entities will find themselves unable to purchase new generations of technology.

“The net effect of this is that it is freezing Russia’s technological arsenal as it is today,” Ms. Kilcrease said. “You can’t upgrade it, you can’t replace it, you can’t improve it.”

“Once you get over the immediate confusion about how to comply with the contents, it is really the long-term corrosive impact that will be most detrimental to Russia,” she added.

Other industry executives say the immediate impact on global trade could be muted, as Russia is not a major global producer or importer of technology goods.

John Neuffer, president of the Semiconductor Industry Association, which represents the world’s major chipmakers, says the industry is still assessing the potential impact of the rules. But Russia is not a significant direct consumer of chips or IT equipment.

Russia’s broader information and communications technology market accounted for only about $25 billion of the trillion-dollar global market in 2019, he said, citing figures from International Data Corporation.

The measures are believed to represent the broadest and most novel use to date of export controls, which have long been tailored to accommodate technology exports due to American production can be used against the United States by foreign militaries or terrorists.

In 2020, the US revised its export control rules to better target Huawei. The new measures not only block the Chinese company from American goods, but also products made in other countries with the help of American technology, preventing it from buying chips in the global market. and crippled their smartphone business.

Martin Chorzempa, a senior fellow at the Peterson Institute for International Economics, said those wider curbs have been “devastating” for Huawei. They could also prove effective against Russian industries, he said, although the measures would also complicate global companies already competing with Russia. Inflation soars and shipping delays.

“The price you pay is that you put a lot of uncertainty into the supply chain,” said Mr. Chorzempa. “Whenever these tools are super powerful, they also have the potential to increase the certainty that businesses rely on.”

https://www.nytimes.com/2022/02/24/business/us-announces-sweeping-restrictions-on-technological-exports-to-russia.html The US announced sweeping restrictions on technology exports to Russia.

Fry Electronics Team

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