By James Pomfret and Michael Martina
HONG KONG/WASHINGTON- Semiconductors and other restricted goods shipped through China and Hong Kong to fuel Russia’s war effort fell by a fifth this year previously undisclosed US Commerce Department data shows, but Hong Kong remains a global sanctions evasion hotspot.
Transshipments through Hong Kong of Common High Priority Items (CHPL) – advanced components including microelectronics deemed by the US and European Union as likely to be used for Russia’s war in Ukraine – fell 28 percent between January and May, a US Commerce Department official told Reuters.
For the same period, transshipments of those items through mainland China, excluding Hong Kong, fell 19 percent , the official said.
Reuters is reporting the previously undisclosed numbers for the first time.
Asked about transshipment of dual-use goods through China into Russia, the Commerce Department referred Reuters to earlier statements outlining its efforts to “restrict Russia’s access to the technologies and other items that it needs to sustain its brutal war against Ukraine.”
Both Hong Kong and China are seen by the US government as key global nodes for Russia to source materials for its military, including semiconductors and drone parts.
“I think there’s some cause for being at least optimistic that we have been able to slow down some of this trade,” the official said, but added: “China is still our number one concern.”
The United States and its allies have accused China of supporting Russia’s war in Ukraine, in part by exporting parts and equipment needed by Moscow’s weapons makers.
The US State Department and Treasury imposed several rounds of sanctions on entities around the world with alleged commercial links to Russia’s military, including shell companies in Hong Kong that had been diverting semiconductors.
The official, who spoke on condition of anonymity, said the dip in illicit flows was the result of several factors, including aggressive enforcement by US authorities, as well as engagement with companies whose products are being transshipped.
“We are talking to any company whose items are showing up on the battlefield,” the official said, without giving names.
The official declined to share the full data set with Reuters, citing the need to protect the department’s access to the information. “What I can say is we have confidence in the source related to imports into Russia.”
The Hong Kong government did not respond to questions from Reuters about the transshipment of goods into Russia, but said it “does not implement, nor do we have the legal authority to take action on, unilateral sanctions imposed by other countries.”
It added, however, that it was “enforcing vigorously” sanctions imposed by the United Nations Security Council, pursuant to the instructions of China’s Foreign Ministry, including those with regard to North Korea.
China’s Customs Administration and Foreign Ministry gave no response to Reuters’ requests for comment.
There was no response to Reuters’ questions from the Russian embassy in Washington.
A separate customs dataset from C4ADS, a Washington-based global security non-profit, showed that over 200 Hong Kong-registered firms shipped nearly $2 billion worth of goods to Russian buyers between August and December 2023.
The data, outlined in an upcoming report by The Committee for Freedom in Hong Kong Foundation (CFHK) and reviewed by Reuters, showed $750 million worth of CHPL items — ranging from high-end chips by Nvidia and France’s Vectrawave, to lower-end chips from Texas Instruments and Intel — were shipped via Hong Kong between August and December 2023.
