Article related information
- Reporter, Jack Lau
- Reporter, BBC Global China Unit Service
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6 hours ago
A BBC analysis found that Chinese companies have been selling sensitive technical equipment needed to manufacture military weapons to Russia, bypassing sanctions.
‘Sinno Electronics’ is also part of this corporate network, which sent goods worth about $200 million (approximately 279 billion won) to Russia even after becoming the subject of U.S. sanctions in September 2022.
Among the items they sent was technical equipment essential to Russian weapons used in the war against Ukraine, including microchips, cameras and navigation.
The BBC’s findings raise questions about whether the US sanctions designed to prevent Russia from securing the parts needed to manufacture weapons are truly effective.
The sanctions were designed to prevent companies around the world from working with Russia and, if they violate them, to block them from the U.S. financial system and punish them from trading globally.
But the BBC has revealed how some companies subject to sanctions have been able to circumvent them and trade with Russia on a large scale.
As a result of the BBC’s analysis of Russian customs records from Import Genius, an American trade data aggregation company, the Sinnoh network sent about 25,000 sensitive goods to Russia from October 2022 to April 2024.
And 76% of these were microchips used to manufacture weapons such as high-precision missiles and drones.
In particular, in the case of microchips, Russia relies mostly on imports due to its lack of domestic capabilities. Currently, the main manufacturing regions in this field are Taiwan, Korea, China, and the United States.
The BBC found that microchips worth millions of dollars sent to Russia by the Sinnoh network were products of American companies such as Texas Instruments and Analog Devices, which the Ukrainian government found in Russian drones and cruise missiles.
Both companies explained that their products are resold many times after they are sold, making it difficult to track where they will ultimately end up. But both companies have come under fire from U.S. lawmakers for not doing enough to prevent their technology from being used in Russian weapons.
Texas Instruments and Analog Devices told the BBC they strongly opposed the “illegal diversion” and “misuse” of their products into Russia.
The couple behind the Sinnoh Network
Sinno Electronics is run by Lin Ching and his wife Peng Minbo, and the couple’s name is prominent throughout the Sinno network.
A BBC analysis found that her husband, Lin Ching, is a director and shareholder in three companies belonging to the Sinnoh network, while Peng owns shares in two other companies.
And some of these companies have the same office address or similar mission statements.
Even after Sinno Electronics was subject to sanctions, Peng exported approximately $26 million worth of American chips and technology equipment to Russia under his own name or the names of other companies in the network.
Additionally, Sinno Electronics was a sponsor of the largest electronics exhibition held in Russia in April this year, and the couple attended in person.
The BBC tried to contact the Lin Chings and other companies in the Xinno network through several channels, but received no response.
Meanwhile, attorney Alexander Dmitrenko, who advises companies on sanctions and export controls at the multinational law firm Ashurst, explained that if a company’s name or address is very similar to a company on the U.S. sanctions list, it is considered a “red flag.”
“It is common for new companies to appear out of nowhere, like mushrooms, and these new companies are actually the same company. In other words, since these newly created companies are not subject to sanctions, they can manufacture, sell, or export products on behalf of companies subject to sanctions.
image copyrightReuters
image captionUkrainian officers inspect a downed drone
Since Russia’s full-scale invasion of Ukraine in February 2022, the United States has accused China of aiding Russia’s war machine by supplying key components.
Accordingly, sanctions were imposed several times to prevent other countries, such as China, from supplying key technologies to Russia.
China has repeatedly denied allegations that it is helping Russia arm itself, while urging peace and dialogue in Ukraine.
In response to the BBC’s findings, the Chinese Embassy in the UK claimed that China “strictly controls the export of dual-use goods.”
Meanwhile, last month, the U.S. Treasury additionally imposed sanctions on 275 “individuals and organizations” that attempted to evade sanctions.
This included Lin and Peng as well as other companies in the Sinnoh network.
If they are subject to sanctions, their assets in the U.S. will be frozen and U.S. banks will not be able to provide them with funds or services. And if this happens, you will realistically be rejected by Chinese banks. This is because Chinese banks do not want to be subject to US sanctions.
“No one wants to be on that sanctions list,” Dmitrenko said, adding, “No major banks will want to work with you, and even major clients will avoid you.”
However, these sanctions pose a bigger problem for companies that operate primarily around the world. This is because they have more to lose if they are cut off from the U.S. financial system.
According to Dmitrenko, it is difficult for U.S. regulators to properly control exports for smaller companies trading between Russia and China, especially those whose names and details can easily change.
The BBC met with sales managers from unsanctioned Chinese microchip companies at an electronics fair held in Hong Kong last October to hear about how they continue to do business while bypassing sanctions.
A female representative, who spoke on condition of anonymity, told the BBC that most of her company’s Russian-based customers make payments through third-party companies, such as brokers in Kyrgyzstan or Hong Kong.
He also said that his company also uses the Shanghai branch of the Russian state-owned VTB Bank. VTB assets stored in U.S. financial institutions have been frozen since February 24, 2022, when Russia invaded in earnest.
When contacted by the BBC about this, VTB’s public relations team in Moscow responded that they could not provide any information in this regard.
Another woman, who works in the sales department of a company that supplies printed circuit boards to Russia, explained that they are shipped by air or by truck along the highway that runs across the border in China’s western Xinjiang region.
In fact, these companies don’t really care about where their products end up.
Whether or not the part is used in a weapon is not something that keeps the boss up at night.
“Business comes first.”
Additional reporting: Olga Shamina
What specific technologies is the Sinno network allegedly supplying to Russia, and how could these technologies be used in Russia’s military efforts?
This article details how Chinese companies are allegedly circumventing sanctions to supply Russia with crucial technology.
Here’s a breakdown of potential interview questions divided into thematic sections:
**Section 1: The Sinno Network and its operations**
* **How did the BBC uncover the connections between Sinno Electronics and the other companies in the network? What evidence led them to believe these were linked entities?** This question delves into the investigative process and the strength of the BBC’s findings.
* **What are the specific strategies used by the Sinnoh Network to avoid detection and circumvent sanctions?** This focuses on the tactics employed, like using shell companies and similar addresses.
* **What are the potential implications of Sinno Electronics’ continued presence at Russian trade shows, even after being sanctioned?** This explores the audacity and potential for continued business despite sanctions.
* **How did the individuals connected to Sinno Electronics, Lin Ching and Peng Minbo, respond to the BBC’s inquiries?** This delves into their accountability and potential denials.
**Section 2: The Role of Sanctions and their Effectiveness**
* **What are the broader implications of these findings for the US sanctions regime?** This question invites a discussion on the effectiveness of sanctions and potential loopholes.
* **How do experts believe the US should respond to these types of evasion tactics?** This explores possible solutions and strengthening enforcement.
* **What are the challenges faced by international regulators in monitoring and controlling trade between countries like China and Russia?** This highlights the complexity of the issue and global cooperation needed.
**Section 3: Ethical Considerations and Moral Dilemmas**
* **What are the ethical implications of companies profiting from supplying materials that could be used in weapons?** This tackles the moral dilemma of profits versus war consequences.
* **Do you believe there are any circumstances where supplying technology to countries under sanctions could be justified?** This encourages a nuanced discussion on exceptions and the gray areas of international law.
* **What are the responsibilities of companies when it comes to complying with international sanctions, especially regarding dual-use technologies?** This explores corporate responsibility and the balance between ethical concerns and business interests.
**Section 4: Looking Ahead and Global Impact**
* **What are the potential long-term consequences of continued technology transfer to Russia?** This looks at the broader geopolitical implications and the potential for escalation.
* **How might this case affect the relationship between China and the West?** This delves into the potential for diplomatic tension and economic fallout.
* **What steps can be taken to ensure greater transparency and accountability in the global supply chain of sensitive technologies?** This encourages brainstorming solutions for a fairer and less exploitable system.
Remember, these are starting points for discussion. Encourage your interviewees to elaborate, share personal experiences, and express diverse viewpoints on this complex and crucial issue.
