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Dysfunctions Last Updated: Feb 7, 2024 - 1:43:08 PM


Russia Evading Technology Sanctions
By Strategy Page, January 18, 2024
Jan 18, 2024 - 1:41:32 PM

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Despite the economic sanctions imposed on Russia because they invaded Ukraine, western technology is still getting to Russia. In 2023 over $7 billion worth of Western tech reached Russia. This is a third of what Russia needs to manufacture weapons and equipment that depend on modern electronics. The rest is needed to keep the Russian functioning. A modern economy requires regular infusions of new technology to keep manufacturing and research activities going. Most of the tech that reached Russia in 2023 came from American and EU (European Union) firms with the rest coming from China. A lot of this tech was dual use, which meant it was needed by firms that were not producing weapons as well as those that were.

Ukraine used to be a major supplier of tech. Before Russia turned on Ukraine in 2014, Russia was one of many foreign customers for Ukrainian technology, including military tech. By 2022, Ukraine and Russia were no longer supporting each other’s defense industries. While Ukraine had NATO nations as a wartime supplier, Russia was on its own and scrambling to cope with numerous economic sanctions imposed after its 2014 invasion of Ukraine, and sanctions became far worse after the 2022 invasion.

Many Ukrainian defense industry personnel have detailed knowledge of Russian defense industries and what the key vulnerabilities are. This enables Ukrainian military intelligence to monitor Russian weapons production. During 2023 Ukraine concluded that Russia had nearly exhausted its pre-2022 stocks of Kalibr cruise missiles, Iskander tactical ballistic missiles and lacked the industrial capability to replace those stocks or even produce a significant number under wartime conditions. Ukrainian and NATO industrial intelligence efforts have identified Russian sources for key missile components that must be imported, and which suppliers are willing to smuggle items into Russia. Smuggled components are a lot more expensive because the smugglers have expenses and must consider losses when smuggled shipments are intercepted and seized. Russia also has to seek out and use alternative components to those it simply cannot obtain. This complicates production because the substitute components do not always function as effectively as the original parts.

Despite all this, Russia adapted, and Ukraine used its detailed knowledge of Russian military production to target key Russian production facilities for attacks. These are carried out by missiles or UAVs equipped as bombers and, if that is not possible, Ukraine has the option to use operatives inside Russia to attack or sabotage targets. So far, these efforts have caused some damage but not halted Russian missile production. The quality of the new Russian missiles is less than before, and Russia accepts this because most of the missiles will still work as intended. Russian-made missiles and munitions were always known to be less reliable and an increase in unreliability is considered acceptable to the Russians, though a relief to Ukrainians be targeted. Dud missiles are not harmless. They will land somewhere in Ukraine, and some will even explode when they hit the ground. Ukrainians are used to Russian missiles and shells not exploding when they land nearby, realize the things might still go off, and usually call for EOD (Explosive Ordnance Disposal) teams to deal with them.

The shabby construction of recently manufactured Russian missiles reduces the number of effective attacks on Ukrainian targets. NATO and Ukraine are continuing and expanding these efforts to all manner of military items, some of them dual use. This includes truck tires. Russian-made truck tires were notorious for their poor quality and unreliability. Before the war, vehicle owners would, if they could, buy foreign tires but that was not an option in wartime. NATO sanctions and Ukrainian sabotage efforts have made tires produced in Russia even more unreliable. This has a disruptive impact on the Russian economy and for Russian troops it’s another reason why supplies or reinforcements don’t arrive on time, if at all.

The Ukraine War has been bad for Russian defense industries and continued sanctions has put many firms out of business while others are barely surviving. A similar disaster took place after the Soviet Union dissolved in 1991 and military procurement funds nearly disappeared for most of the 1990s. Since the late 1990s surviving Russian defense firms have been trying to rebuild. The Ukraine War seemed, at first, to be a source of more business. There was more activity, but of the malevolent kind that brought more problems rather than more procurement money.

The Russian invasion of Ukraine in February 2022 and Ukraine’s successful defense came as an unpleasant shock to China, which had increasingly been doing business with Ukraine and following developments in both Russia and Ukraine. The Chinese were also shocked to find that their assessment of the situation in Ukraine after Volodymyr Zelensky was elected president in 2019 was more accurate than Russia’s. Vladimir Putin seemed to dismiss Zelensky, an entertainment lawyer and sometimes performer, as an opportunistic actor and comedian while the Chinese saw Zelensky as a shrewd political operator who quickly disrupted Chinese plans to abscond with a lot of Ukrainian military technology and manufacturing trade secrets. China was surprised at how badly Russia misjudged Zelensky’s preparations of Ukraine for a Russian escalation or invasion. China had admired how Russia used special operations and political preparation in 2014 to quickly seize the province of Crimea. A similar effort to take two provinces (Donbas) in eastern Ukraine a few months later was only partially successful. China was waiting for Russia to come up with another bright idea to deal with that. China was not expecting Russia to blunder into a major miscalculation by invading Ukraine.

That invasion triggered an unexpected imposition of heavy sanctions on Russia. The mess in Ukraine has fundamentally changed the relationship between China and Russia. The most obvious changes for China are economic. Foreign trade accounted for about 28 percent of Russian GDP and about half was disrupted by the 2022 sanctions. China is Russia’s largest trading partner and, together with Belarus and a few other nations, continues to trade with Russia. The other half is currently halted, or soon will be, by sanctions. Russia has experience in evading economic sanctions and knows that greed in notoriously corrupt countries provides customers willing to switch to heavily discounted Russian oil. There are many similar but smaller customers. The discounts can be high; sometimes 20-30 percent off the world price, which is currently a hundred dollars a barrel. Even with heavy sanctions and smuggling related discounts, Russia is still making as much as they used to before the Ukrainian escalation.

Several NATO (the North Atlantic Treaty Organization) nations were still buying Russian oil and natural gas because they could not afford to cut those imports completely until they had sufficient alternate sources and avoided an economic collapse. This took about a year, which was an essential move to avoid economic collapse in NATO nations getting most of their oil and gas from Russia.

Although China is a major customer for Russian oil and gas, a new pipeline has not yet been built to get them the product. Importing oil by sea is much more expensive because that is smuggling and risky. That means a larger discount and more risk of confrontations with NATO naval forces sent after tankers used for smuggling. Russia has threatened to use its handful of modern nuclear subs to go after NATO merchant shipping and risks seeing their small nuclear submarine force disappear at sea. Western navies stalk Russian nuclear subs in peacetime and Russian subs seek to do the same to Western nuclear missile (SSBM) submarines. This is an activity dating back to the Cold War and little is made public about who is ahead in the peacetime stalking competition.

All this degrades future Russian economic prospects. That has a negative impact on Russian allies. These foreign supporters now see their powerful patron as less powerful than believed and now feel desperate or simply afraid. And then there is China, which does not have allies, only trading partners and tribute states. Russia is now moving from trading partner to the lower tribute state status.

China has territorial claims on Russian territory on or near the Pacific coast. Japan has a dispute with Russia over the ownership of some Pacific Coast islands that Russia took at the end of World War II as well as fishing rights in the area. Until recently Japan was rather timid in its requests to Russia about these islands. Once it became clear how poorly Russia was doing in Ukraine, Japan has become more open and aggressive about the island dispute and Russian efforts to keep Japanese fishing boats out of areas they have long worked in.

China has, since the 1990s modernized and expanded its armed forces to the point where, on paper, China has stronger ground, air, and naval forces than Russia. Chinese forces have not been in combat since the 1970s and back then found the less numerous but more experienced and motivated Vietnamese surprisingly effective. Russia encountered a similar situation in Ukraine, just as they did in Chechnya in the 1990s and Afghanistan a decade before that. A major difference between China and Russia is that the Chinese study and learn from their mistakes and the mistakes of others. Russia did not pay attention, especially to what was going on in Ukraine between 2014 and 2022.

China has paid attention to how Ukraine prepared and how the West responded. This is important for China because of their plans and efforts to take possession of Taiwan and the South China Sea. Taiwan was also paying attention, especially since 2014 and increased its preparations to defeat a Chinese attack. Massive sanctions on China would be another matter because China is now the largest trading nation in the world, followed by the U.S. and Germany. These three nations are the only ones with trade exceeding a trillion dollars. Russia was 19th before the sanctions and with the sanctions will be fortunate to remain in the top 30 nations. If China did face the degree of sanctions Russia received, the results would be catastrophic because while the Chinese economy is much larger than Russia’s, it is much more sensitive to major disruptions. While China is still a communist police state, there is greater risk of major internal unrest if the economy is mismanaged. Incurring heavy sanctions is seen as mismanagement.


Source:Ocnus.net 2024

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