Illicit chip flows to Russia seen slowing, but China, Hong Kong remain a global sanctions evasion hotspots

Transshipments through Hong Kong of Common High Priority Items (CHPL) — advanced components including microelectronics deemed by the U.S. and European Union as likely to be used for Russia’s war in Ukraine — fell 28% between January and May, according to data by the U.S. Commerce Department.

For the same period, transshipments of those items through mainland China, excluding Hong Kong, fell 19%, the official said. Reuters is reporting the previously undisclosed numbers for the first time.

A separate customs dataset from C4ADS, a Washington-based global security non-profit, showed that over 200 Hong Kong-registered firms shipped nearly $2 billion worth of goods to Russian buyers between August and December 2023.

The data, outlined in an upcoming report by The Committee for Freedom in Hong Kong Foundation (CFHK) and reviewed by Reuters, showed $750 million worth of CHPL items – ranging from high-end chips by Nvidia and France’s Vectrawave, to lower-end chips from Texas Instruments and Intel – were shipped via Hong Kong between August and December 2023.

Some of these restricted goods were shipped to sanctioned Russian firms, CFHK said.