China Warned Not to Help Russia Evade Sanctions, Obtain Semiconductors: Biden Administration

U.S. National Security Adviser Jake Sullivan speaks in Washington, on March 22, 2022. Alex Wong/Getty Images

The Biden administration warned China on March 23 not to help Russia evade Western sanctions over its invasion of Ukraine, saying G7 countries will soon announce a unified initiative to prevent “systematic sanctions busting.”

All countries will be held to the same requirements, U.S. officials said, although China has been receiving special attention after Beijing announced a “no-limits” partnership with Russia shortly before the war in Ukraine began.

“That’s not specifically about China, but it will apply to every significant economy and the decisions that any of those economies take to try, in an intentional and active way to undermine or weaken the sanctions that we put in place,” White House national security advisor Jake Sullivan told reporters aboard Air Force One.

President Joe Biden is on a trip to Europe where he is scheduled to attend an emergency NATO summit in Brussels on March 24, when leaders of the 30-nation bloc will discuss the ongoing war in Ukraine and challenges posed by the Chinese regime’s tactic support.

Biden will also meet with other G7 leaders and European Union leaders, before traveling to Warsaw, Poland on March 25.

Sullivan said Washington has already communicated this message to China.

“We expect similar communication by the European Union and individual European countries. And we’re also on the same page in that regard,” Sullivan said.

The European Union and China are scheduled to hold a summit on April 1, where the Ukraine crisis will be front and center.

The U.S. Commerce Department has imposed sweeping restrictions on exports to Russia, banning Moscow’s access to U.S. semiconductors, computers, telecommunications, and information and security equipment.

The United States is concerned that Beijing and China-based companies could help Russia “backfill” and obtain these restricted items, Sullivan said.

“We obviously have tools available to us to ensure that backfilling can’t happen,” he added.

Sullivan also warned Beijing not to take advantage of business opportunities created by Western sanctions.

He added that the United States and G7 allies will respond to any “systematic efforts, industrial-scale efforts to try to reorient the settlement of financial payments” targeted by the sanctions.

On Feb. 26, the United States, the European Union, Canada, France, Germany, Italy, and the UK announced joint action to remove certain Russian banks from the SWIFT international payment system.

Separately, U.S. Commerce Secretary Gina Raimondo, in an interview with Reuters on March 23, warned China against sending semiconductors to Russia, saying that all Chinese semiconductor companies relied on U.S. software for the manufacturing of these tiny chips.

“If we find that they are selling chips to Russia, then we can essentially shut them down by denying them use of that software, and we’re absolutely prepared to do that,” Raimondo said.

The fabrication of semiconductors, which are powerful chips that power everything from smartphones to missiles, require thousands of manufacturing steps. First, the chips need to be designed using IC design softwares that are known as electronic design automation (EDA) tools.

China is yet unable to develop its own EDA tools and such software development is currently dominated by American companies such as California-based companies Synopsys and Cadence.

She said that the United States was monitoring “hour by hour, minute by minute” for possible violations of its export controls on Russia.

Raimondo said she had not yet seen any China-based firms violating U.S. export controls, but added that the U.S. Commerce Department does not disclose investigations or enforcement actions before they are finalized.

“What you’re seeing now is really unprecedented levels of cooperation between the U.S. and our like-minded allies,” Raimondo said. “I’m sure that China takes notice that America is strong and that our relationship with our partners is stronger than it’s been in a long time.”