US Needs More Export Enforcement Resources, Efforts to Counter Russia, Think Tank Says

The U.S. should double down on its resources, oversight and enforcement to prevent Russia from acquiring semiconductors and other dual-use goods used to power its war against Ukraine, the Silverado Policy Accelerator said in a report this week. If the broad Western export controls against Russia aren’t followed up with strict enforcement, the think tank said, Moscow will continue to find ways to import chips, including from China.

The think tank specifically called for more resources for the Bureau of Industry and Security, saying the agency needs more funding to counter Russian efforts to adapt to the trade restrictions. “The vast and opaque global supply chain networks for technologies like semiconductors create enforcement challenges even for the most adept authorities,” Silverado said.

The recent funding “boost” included in the FY 2023 government spending package “should help,” the think tank said (see 2212200025). But “these efforts must be sustained over the long term” to make sure BIS has the “technological and human resources needed to maximize effectiveness of export control enforcement.” BIS Undersecretary Alan Estevez in December said he would welcome more resources (see 2212060059).

The U.S. also should create a new interagency task force on export enforcement, leveraging input from DOJ, the Commerce Department,the FBI and the Department of Homeland Security to identify gaps in export restrictions and other sanctions, Silverado said. The increased coordination would help the agencies “identify and shut down illicit transshipment and other evasion schemes,” “pursue civil and criminal penalties to the fullest extent possible” and work alongside the Treasury Department and its secondary sanctions authorities.

The task force also should work to prioritize U.S. export enforcement for “particular sectors of the greatest concern,” such as semiconductors, the report said. Silverado called on the U.S. to specifically curb Russia’s chip imports from China and Hong Kong, “including by working with the larger global coalition” and industry.

The U.S. also should better understand the “exact product mix" that Russia is importing from non-sanctioning countries and to what extent Russia is acquiring these technologies through other means, such as through appliances or old computers. It should also study whether the U.S. and its allies need to expand the restrictions to “fill gaps or whether Russia’s continued access could be best deterred through augmented export control enforcement actions.”

A new private sector export enforcement advisory committee could also play a “key role” in giving the U.S. better insight on market trends and activities, Silverado said. “Government efforts alone will not be sufficient to strengthen export enforcement and deter sanctions evasion,” the think tank said, adding that more input from industry will improve the “government’s ability to take action against bad faith and illicit actors that are aiding adversaries and distorting markets to the detriment of legitimate actors.”