Shortly after Russia's full-scale invasion of Ukraine last year, engineers at the Russian telecommunications company Convex needed to find American data transmission equipment for Russian intelligence. After Western countries imposed sweeping new trade restrictions, shipments were halted. However, Convex employees soon found a solution.
The Russian Federation continues to circumvent the ban on the supply of technologies
Although the US technology provider Cisco stopped selling to Russia on 3 March 2022, Convex engineers easily obtained the equipment they needed from the company through a little-known Russian e-commerce site called Nag, which circumvented international trade restrictions by purchasing US equipment through a network of suppliers in China.
Convex engineers then visited the Russian Federal Security Service office in Yekaterinburg to install equipment that helps classify and send data to the authorities.
"Arrange with FSS the placement of the Cisco Catalyst WS-C4948E switch," a Convex engineer wrote on March 23, 2022, according to a company communications log obtained by the New York Times.
In the 22 months since the start of its full-scale war against Ukraine, Russia has largely continued to buy the technology it needs to keep its economy running. After export restrictions and corporate bans initially disrupted trade, Russian suppliers found loopholes and developed workarounds. Virtually any commercial equipment, including basic telecommunications technology, surveillance equipment, microchips for advanced computing and weapons systems, and drones, was not too difficult to obtain.
Russian authorities and companies have teamed up to exploit loopholes in the bans. They tapped into networks of intermediaries, including in China, and disguised their activities through shell companies, according to leaked Russian government emails, trade documents and recordings of online conversations between Russian engineers obtained by The Times.
Russia has also turned to countries that have taken a neutral stance on the war, such as Morocco and Turkey, using their ports to receive goods from global technology production centres, which are then loaded onto other ships bound for Russia — a process known as "transshipment". The banned goods have since become available again for purchase from well-known suppliers and on easy-to-use e-commerce sites such as Nag.
Flexibility was paramount. In weekly emails, Russian trade officials shared advice on which ports to ship goods to, who would trade rubles, and where to repair Russian-flagged ships, documents show. If one supplier stopped selling, they would find another. If a route crossed, new ones took its place.
This data provides a rare glimpse into a race in which Russian traders are reliably outpacing US efforts to ban technology shipments to the Russian Federation. Their success shows how difficult it is to stem the global flow of commercial technology, and raises questions about the effectiveness of Western trade restrictions, as well as whether tech giants should do a better job of controlling the destinations of their products, and how realistic it is to do so at all.
The small number of government investigators in the US and Europe cannot keep up with the often shadowy flows of goods, says economist Elina Rybakova, who studies sanctions evasion at the Peterson Institute for International Economics.
She added that large tech companies should do more to stop such flows of goods to Russia.
Port of Morocco
When sanctions against Russia came into force last year, Russian electronics supplier Prosoft felt the effects.
Representatives of the company that sells biometric surveillance equipment and technologies for heavy industry and critical infrastructure facilities have turned to the Russian government's trade mission in Morocco for help.
A week ago, they could be easily obtained from American and European suppliers. Now we risk starting to cut production (stocks in the warehouse are low), wrote the head of Prosoft, referring to the technologies whose supply is now banned.
The table attached to the message lists hundreds of American, European and Japanese chips and sensors required by Microsoft.
At the time, the Russian economy was absorbing the first effects of trade restrictions. The ruble plummeted, inflation and interest rates skyrocketed, Russian banks were cut off from much of the global financial system, and oligarchs felt helpless as their yachts were confiscated.
But the pain did not last long, as Russian President Vladimir Putin restructured the Russian economy. Russian government officials and business leaders quickly came together to find workarounds. Loyalists of the Kremlin regime profited from the withdrawal of Western companies from Russia.
In Morocco, the Russian trade mission, which looks after the country's economic interests abroad, also helped Russian companies regain their positions. After Prosoft asked for help, representatives of the trade mission took action.
We are in constant contact with the CEO of the Moroccan state-owned port of Tangier-Med. There will be no problems with servicing Russian-flagged vessels," one Russian official wrote in an email in April 2022.
Tangier-Med said that the port is leased to shipping companies and has no information or responsibility for ships passing through the complex. Tangier-Med, which handles more than eight million containers a year, connecting to 180 international ports, was allegedly unaware of the goods entering Russian ports before or after their stay at Tangier-Med, as well as the servicing of Russian vessels.
Until November 2022, Russian trade representatives in Morocco boasted that their "direct support" had turned the African country into a transshipment centre for electronics. Goods from Taiwan, China, and other production centres were unloaded at Tangier Med and then reloaded onto other ships bound for Russia.
Taking into account the long-term nature of cooperation with the Moroccan partner, the volume of deliveries can be about $10 million a year, the sales department employees write about their work at Prosoft.
"Prosoft also supported the supply of Western technology through a little-known company registered in Casablanca, Morocco, which was engaged in the processing of scrap metal. After the outbreak of full-scale war, Invent Morocco set up a new website and shipped sanctioned technology to Russia via Morocco, including microchips from Texas Instruments, Intel and NXP, according to trade records. In 2022, the United States restricted exports to Russia of semiconductors manufactured on US equipment or using US intellectual property.
Invent Maroc, managed by Alexandre Trints, had no prior history of international exports. However, it has sourced electronics from Costa Rica, Malaysia, Taiwan, China, Japan and Mexico, according to trade data.
In a phone conversation this month, Trintz said he had supplied technology to Russia in the past, but not after the full-scale war.
Prosoft's analysis of the proposals identified nearly 300 products containing Intel chips, as well as Nvidia components and a computer chip optimised for artificial intelligence developed by Google. Although it is unclear how the imports were used, the US chips have been found on Russian missiles and drones, according to arms experts.
Nvidia, Intel and Google declined to comment. Texas Instruments said it opposed the "illegal diversion of its products to Russia". Prosoft, NXP and Russia's trade representative in Morocco did not respond to requests for comment.
In October 2022, Russian trade officials said they had set up a network of 20 operators at the port of Tangier-Med to "promptly carry out" the logistics of loading onto "feeder" vessels that ultimately go to Russia, according to a weekly shipping report. Another report noted that Turkish ports accept payment in rubles.
The sanctions restrictions have been successfully overcome, according to a Russian government report on the Turkish trade route in March this year.
Online shopping
Little-known Russian e-commerce sites such as Nag, OCS Distribution, 3Logic Distribution and 4Telecom sell sophisticated technology produced by major US and European telecoms companies such as Cisco, HP, Juniper, Ericsson and Nokia.
Many of these platforms had been freely selling Western technology for decades, but the war restructured their supply chains. Since then, the platforms have received hundreds of millions of dollars worth of technology from China, according to trade data.
According to the Silverado Policy Accelerator, a non-profit organisation that studies Russian trade routes, China and Hong Kong supplied 85% of the semiconductors imported to Russia between March 2022 and September 2023, compared to 27% before the start of the full-scale war.
The Nag platform, which sells equipment to regional telecommunications companies and surveillance contractors in Russia, is one of the largest. According to trade data, since the start of the full-scale war, it has purchased about $100 million worth of sanctioned US technology through intermediaries. In total, it has imported $150 million worth of equipment from China this year, the data show. The communications equipment banned for import into Russia can be easily found on the company's website by filtering it by price, type and quantity.
Nag described logistical problems caused by international sanctions. In May 2022, a Nag employee wrote to a Russian customer that "the old transit system has run out", which led to a delay in the delivery of $20,000 worth of Juniper equipment. A month later, Nag reported that the problem had been resolved and that the equipment would arrive in the coming months.
Technology was also available to build a system of surveillance and censorship on the Internet. Russian telecommunications operators are required by law to provide information about customer communications to security services, which means they must buy specialised equipment that sends data to government agents. On Nag message boards, which are currently only accessible from within Russia, engineers have been posting technical advice on how to make the systems work according to FSS specifications.
Ericsson, Juniper, Nokia and IBM said that any imports to Russia were made without their consent. OCS Distribution stressed that it did not violate international sanctions and restrictions. HP, 3Logic Distribution and 4Telecom did not respond to requests for comment.
The network of companies and brands operated by Nag in Kazakhstan, Uzbekistan and the United Arab Emirates also helped to conceal the supply of sanctioned technologies. In total, almost $10 million worth of Cisco equipment and about $1 million of Nokia and Intel products entered Russia through Nag last year.
In the FSS offices in Yekaterinburg, Cisco equipment installed by Convex engineers stood next to Juniper routers. In less than a year, Western technology had become so accessible in Russia that Convex engineers could make purchases.
During this year's conversation about Convex's internal messaging system, the engineers focused on a new vendor they had "spotted". This vendor, going by the name sale-server.ru, had a number of sanctioned technologies from HP, IBM, and other vendors. More importantly, the price was favourable.
Cheaper than Nag, wrote one Convex employee.
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