Twelve companies from mainland China or Hong Kong will be officially included in the U.S. sanctions list on April 17. At the same time, the media revealed that a Hong Kong company exported many electronic chips to Russia but has not yet been sanctioned. Some experts believe that there is not much difference between Hong Kong and mainland China, so the United States should re-examine its policy towards the former.
The Bureau of Industry and Security (BIS) of the U.S. Department of Commerce will update its “Entity List” on April 17. Twelve companies located in mainland China or Hong Kong will be included in this update because these companies try to avoid U.S. export controls, which stipulate the limitations to acquiring or attempting to acquire U.S. products in support of Russian military activities. Some of the “to be listed” enterprises were found to purchase goods for Russian companies subject to U.S. sanctions or export controls.
However, the list of 12 companies to be sanctioned does not include at least two Hong Kong firms recently named by the media, Agu Information Technology (hereinafter referred to as Agu) and Dexp International Limited (from now on referred to as Dexp).
Agu and Dexp are two Hong Kong enterprises recently revealed by the media to be suspected of helping Russia obtain American chips via a detour. Such transaction information comes from the Russian customs data of the Indian research company Export Genius (EG) obtained by Nikkei Asia and published in a related report on April 12.
The report revealed that from Feb. 24, 2022 (the outbreak of the Russia-Ukraine War) to Dec. 31, 2022, Russia imported 3,292 semiconductor products, each costing more than US$100,000. 2,358 of these products were marked as products from Intel (INTC), Advanced Micro Devices (AMD), Texas Instruments (TXN), and other U.S. chip manufacturers. About 75 percent (1,774) of these 2,358 transactions were completed through companies in mainland China or Hong Kong, with a total transaction value of approximately US$570 million.
In 2021, there were only 230 transactions on U.S. chips between Hong Kong or mainland China, and Russia, with a value of US$5.1 million. This means that the scale of transactions has increased tenfold within one year.
Among them, Agu has six transactions between September and December 2022 involving more than 60,000 pieces of Intel semiconductors, with a total value of approximately US$18.7 million, including microprocessors with a unit price of US$13,000 with a Russian company called Mistral. Agu Hong Kong, a private company limited, was registered on April 11, 2022. The registered Chinese name of the company is 啊咕信息技術有限公司 (Agu Information Technology Co. Ltd.).
Since the outbreak of the Russo-Ukraine War, to limit the combat effectiveness of the Russian army, the United States banned the export of American-made chips to Russia, claiming such chips may be used in armaments to improve the speed and response capabilities of weapons. Although the CCP has repeatedly denied providing Russia with military equipment, chips that play a crucial role in military equipment are flowing from Chinese companies to Russia on an unprecedented scale.
Tokumori, president of a Japanese high-tech company, told The Epoch Times on April 13 that he was not surprised by the CCP’s actions. He said, “With the ongoing intensified competition and confrontation between the U.S. and China, the CCP will treat the U.S. and the EU as its main rivals.
And although Russia has now become a weakened entity, it can still distract the attention of the United States to a certain extent. In this way, the CCP still regards Russia as its heavyweight strategic partner in the struggle with the United States and the West,” he said.
