Despite EU sanctions, microchips made by Dutch companies still end up in Russia as many millions of western-made chips went through intermediary companies to Russia since the beginning of the full-scale invasion in Ukraine through December 2022, NOS reports.
“The joint investigative editors of NOS and Nieuwsuur were given access to trade data, spoke to involved companies, government agencies, experts, and researchers, and were given access to confidential documents. The study provides the first insight into the scale on which microchips from Dutch manufacturers end up in Russia,” NOS wrote.
A small group of Chinese companies obtains the Dutch chips and re-exports them to Russia month after month. Moreover, one such company is “on the US sanctions list for supplies to the Russian defense industry.” Despite the increasingly stricter sanctions, there was no decline in exports in recent months.
According to the investigators, three Russian companies linked to the defense sector received several hundred deliveries from Dutch major chip producers such as NXP and Nexperia. “Dutch” chips have been found in captured Russian weapons – a Russian armored howitzer, a cruise missile, and an attack helicopter.
Previous research has already found chips from NXP and Nexperia in Russian drones, and, NOS says, an NXP chip was found in an Iranian kamikaze drone.
Companies emphasize that they comply with the sanctions rules and don’t do business with Russia, while their customers are also not allowed to sell chips to Russia, although they claim they are powerless if chips, of which NXP and Nexperia produce many billions worldwide annually, still end up in Russia through parallel trade.
The shadowy brokering of microchips, as far as the government can see, takes place without the permission and without the knowledge of Dutch manufacturers, the Dutch Ministry of Foreign Affairs reports in a response to NOS.
An even larger flow of microchips, manufactured by companies outside the Netherlands, ends up with Russian importers. “For the month of November alone, there are at least 2 million chips spread over dozens of companies,” NOS wrote.
James Byrne, the director of the open-source intelligence and analysis research group at the British think tank RUSI said that NXP chips were found in 10 of the 27 Russian weapon systems that RUSI examined at the request of Ukraine last summer.
NOS says the EU sanctions against Russia are massively circumvented, for example, by small companies that ship chips to Russia via parcel post.
There are also mostly Asian traders who acquire Dutch chips and, unhindered by sanctions, resell the products to Russia at high-profit margins. According to the data available to NOS and Nieuwsuur, the largest intermediary trader in Dutch chips is the US-sanctioned China-based Sinno Electronics, which still has not been under the EU sanctions.