US sanctions have tanked Russian semi-chip imports from China and Hong Kong, new data shows

• Illicit Russian semiconductor imports have fallen this year, Reuters reported.
• So-called transshipments bypass US sanctions by first exporting illicit goods to an secondary destination.

Chinese trade flows of restricted technology into Russia have wavered this year, with semiconductor imports losing ground amid US sanctions, Reuters reported.

Transshipments of advanced components through mainland China fell 19% between January and May, while shipments through Hong Kong dropped 28%, the outlet said.

The Commerce Department provided the previously undisclosed data. An official told Reuters that the slowdown resulted from the aggressive enforcement of US sanctions.

Also cited was closer cooperation with any firms whose products were transshipped. This refers to a practice where illicit goods are first exported to an intermediate destination, which helps circumvent restrictions. It's been a known risk to US efforts since sanctions began.

"We are talking to any company whose items are showing up on the battlefield," the official told Reuters, but did not specify the firms' names.

However, the official did note that China remains a top concern. The country has been a crucial component to Russia's war effort in Ukraine. While its 2022 invasion earned Moscow a slew of Western trade and finance restrictions, its trade with Beijing has kept expanding.

According to a new report by The Committee for Freedom in Hong Kong Foundation, that includes the transfer of advanced semiconductor products, which can be integral to battlefield technology.

Between August and December of last year, $750 million worth of Common High Priority Items — a Western-tracked list of technologies most essential to Russia's war — were traded through Hong Kong, the data showed.

Among top chipmaker brands whose products were shipped into Russia, CFHK named, Analog Devices, Intel, and Nvidia.

Customs data reviewed by Reuters found that a total of $17.6 million worth of Nvidia goods entered Russia through Hong Kong, after first trading in different markets. These include China, Taiwan, Turkey, Thailand, Serbia and the United Arab Emirates.

Looking ahead, China's capacity to provide Russia with Western chips may face more challenges as Washington considers fresh restrictions on semiconductor imports to Beijing. That's part of an ongoing effort to limit China's access to advanced technology, which the US has framed as a national security issue.