US targets Chinese, Indian companies servicing Aeroflot

US targets Chinese, Indian companies servicing Aeroflot

Washington claims violators are cashing in on Russian sanctions.

WASHINGTON:
The US has stepped up the pressure on China and India for refusing to join Western sanctions against Moscow, threatening to punish businesses that provide service to Russian airlines flying to Beijing, Delhi and elsewhere.

The Commerce Department last week updated a list of 153 planes operated by Russian and Belarusian companies — nearly all made by Boeing — that flew into those two countries without authorisation from the US. Washington says the flights violate sanctions restricting exports of American technology.

“Maintaining this list reinforces Russian President Vladimir Putin and his enablers that they are isolated from the world, and anyone who seeks to enable their aggression or flout our export controls do so at their own peril,” Commerce secretary Gina Raimondo said in a statement.

American export controls have an unusually wide reach. The Russian sanctions encompass not only carriers that fly US-made planes, but even companies in countries such as China or India that refuel, repair or service these aircraft with the knowledge that they are violating sanctions.

The Commerce Department earlier this month suspended exports to Aeroflot and two other Russian airlines in response to ongoing sanctions violations. The move bars these carriers from receiving US parts or services for their aircraft, without which the airlines will have difficulty operating.

In the announcement, the department cited cities where the carriers have continued service to and from Moscow, including Beijing, Delhi, Dubai, Istanbul and the Turkish city of Antalya.

While many countries have ended direct flights into and out of Russia, some Asian and Middle Eastern nations with close ties to Moscow have allowed service to continue. Washington’s highly publicised enforcement measures aim to pressure the latter countries to sever those ties.

The US also has cast a wide net on semiconductors and other electronic components, covering even foreign products that contain more than 25% restricted content by value or are made with US technology.

Similar curbs previously dealt a heavy blow to Huawei Technologies, China’s largest telecommunications equipment maker.

Straightforward export bans by the US, Europe and Japan would have a limited effect. Russia sourced 57% of its semiconductor imports from China in 2020, according to the Peterson Institute for International Economics, giving Moscow continued access to high-tech goods it needs to continue its war in Ukraine.

A senior US official has warned that companies in China and elsewhere are trying to profit from the Ukraine crisis. If Chinese enterprises such as Semiconductor Manufacturing International Corp try to export chips made with US equipment or design software to Russia, they could pay a price.

US President Joe Biden warned Chinese counterpart Xi Jinping in a call last month that Beijing would face consequences if it provided support to Russia. Any measures taken by Washington against third countries accused of violating the sanctions almost certainly would prompt a strong backlash.

Whether penalties are imposed in a given case likely will involve high-level political decisions. A senior Commerce Department official said the agency has told the Chinese Embassy in the US how broadly the restrictions and penalties are applied, and advised against running afoul of the curbs.

At the same time, the US looks to bring more partners on board with its sanctions campaign to bolster its effectiveness. There are now 37 countries involved in the coalition of export curbs against Russia, with South Korea and Switzerland among those joining later on.

Though Washington itself has banned imports of Russian oil, it has no provisions to punish other countries that continue to buy the fuel. Biden urged Indian Prime Minister Narendra Modi not to increase purchases of Russian crude when the two leaders met this month, but there is little more Washington can do on that front.

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