New Evidence on Loopholes in the Sanctions Regime According to our research and more comprehensive analysis conducted by the Kyiv School of Economics, Russia employs a range of evasion strategies in order to continue accessing essential components and defy the intent of the sanctions. [...] The Center for Strategic and International Studies (CSIS) writes in a report that shortages of certain higher-end components are forcing the Russian Ministry of Defense to substitute them with lower-quality alternatives.7 These findings are based on usage patterns of Russian military equipment on the battlefield, for example, the use of less effective missiles outside of their intended purpose (fo. [...] In the last quarter of 2021, imports of critical components picked up markedly, in particular in December – likely indicating the build up of stocks in anticipation of challenges regarding the acquisition of components critical for Russia’s military production. [...] Components Trade in 2023 Based on partial data for a subset of goods – 223 of the 386 10-digit codes included in our main analysis – we can investigate how trade with certain “critical components” developed in the first quarters of 2023.25 In the first three months of the year, Russian imports of these products reached $5.4 billion, a 14% drop compared to the last quarter of 2022 (see Figure 17). [...] For one of the most important categories of “critical components” – semiconductors26 – we find a 23% decrease from the fourth quarter of 2022 to the first quarter of 2023.27 44% of their first quarter of 2023 imports were produced in – and 83% shipped to Russia from – China, including Hong Kong (see Figure 18).
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