Russia failing to by-pass sanctions on high-tech goods

A view shows freight cars, following Lithuania’s ban of the transit of goods under EU sanctions through the Russian exclave of Kaliningrad on the Baltic Sea, in Kaliningrad, Russia June 21, 2022. REUTERS/Vitaly Nevar

BRUSSELS, Sept 2 (Reuters) – Russia is trying, but failing, to by-pass Western sanctions on high-tech goods for military purposes and its energy sector, and it is struggling to obtain international funding, U.S. Sate Department sanctions coordinator James O’Brien said on Friday.

Europe, the United States, Canada, Japan and Britain have imposed a slew of sanctions on Moscow following its invasion of Ukraine in February, blocking its access to its own foreign exchange reserves, to financial markets and advanced western technology, to reduce the Kremlin’s ability to wage war.

“We see sanctions as working,” O’Brien told reporters during a visit to Brussels for talks with European Union officials. “We know Russia is trying to obtain equipment and finance. We don’t think it’s doing well.”

“We see a lot of substitution of lower-quality items: consumer-grade electronics for military-grade targeting and communications equipment,” he said. “If they want to try to use it for a purpose it’s not intended for, that’s great do-it-yourself, but not a way to run a modern armed conflict or an economy.”

Russian President Vladimir Putin says the West’s economic “blitzkrieg” has failed though has admitted that damage has been done to the $1.8 trillion economy.

Some EU officials are concerned that China or India might help Moscow by-pass sanctions by selling dual-use equipment that could be used for military purposes, but O’Brien said Russia had tried and failed to obtain materiel this way.

“Russia is now in a situation of having to buy from unfamiliar vendors at uncertain prices and to obtain equipment of unknown quality. There is no way to run a modern economy on that basis,” he said.

He said Western countries would seek to increase pressure on Moscow in the coming months, closing off potential loopholes in the sanctions regime and a particular focus on “choke points” in the Russian economy.

Reporting by Jan Strupczewski, Editing by William Maclean

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