US Penalties on Chinese Firms Supporting Russia Are 'Ridiculously Inadequate,' Senator Says

The Biden administration is doing too little to counter China’s material support for Russia’s war machine, the ranking member of the Senate Foreign Relations Committee said July 30.

While the State Department has noted that 70% of the machine tools and 90% of the microelectronics that Russia is importing are coming from China (see 2407010031), “the administration has not acted in proportion to the scale of these sins,” Sen. Jim Risch, R-Idaho, said at a committee hearing. “Recent actions on some Chinese microelectronics companies are ridiculously inadequate. Aggressively targeting China should be the top priority in U.S. sanctions policy.”

Deputy Secretary of State Kurt Campbell defended the administration, testifying that "what China has done in supporting the Russian defense industrial base is a subject of deep concern" and has led the executive branch to sanction hundreds of firms.

The administration announced last month it was taking additional measures to degrade Moscow's war machine, including sanctioning seven Chinese companies that provide microelectronics and other dual-use goods to Russia's defense industrial base (see 2406120036). A Treasury Department official said earlier this month that the administration is making headway in persuading China to stop shipping certain dual-use goods to Russia (see 2407110001).

Risch also criticized the administration on several other matters. He accused it of failing to curb Chinese purchases of Iranian oil and asserted it has shown little enthusiasm for implementing recently enacted authorities for sanctioning Iranian oil (see 2406200008). Treasury Secretary Janet Yellen said in June that the shadow fleet serving Iran has “proven difficult for our sanctions to touch" (see 2406040070).

Risch said Congress has tried for more than a year to negotiate a major China bill but has failed to reach a deal. He blamed the administration and some lawmakers for the stalemate, saying they don't want to take “tough action” against China. Committee Chairman Ben Cardin, D-Md., said he wants Congress to finish a China bill but believes the only way that will happen “is if we genuinely work together, listen to each other [and are] willing to compromise.”

Risch also criticized the State Department’s proposed rule exempting Australia and the U.K. from International Traffic in Arms Regulations under the Australia-U.K.-U.S. (AUKUS) security partnership, saying it excludes “the exact technologies we need to advance AUKUS” (see 2406030056) and [Ref 2407220007]). The State Department has maintained that the exemption would cover the "vast majority of current licensed defense trade" between the U.S. and Australia and the U.K. (see 2404300050).

Also during the hearing, Campbell testified that China has taken “modest steps” to stem the flow of illegal fentanyl drugs to the U.S. but must do more. While China has undertaken “some criminal prosecutions” and has acted against a “few of the companies involved,” a “large number” of Chinese companies continue producing fentanyl precursor chemicals, he said.

“Increasingly, the Chinese recognize that since so much of that is coming from manufacturers in China, they have to take more steps,” Campbell testified in response to a question from Sen. Tim Kaine, D-Va. “They have not done so to date and we need to stay on them.”

The administration, which removed China’s Institute of Forensic Science from the Commerce Department's Entity List last year, has said the decision has led the Chinese government to become more helpful on fentanyl (see 2312120070).