The US decision is, of course, related to the Russian invasion of Ukraine on Thursday.

Restrictions on foreign goods may be the strictest for Russia.

US companies must now obtain licenses to sell computers, sensors, lasers, navigation and telecommunications tools, aviation and marine equipment. The United States rejects almost all applications.

The new rules also force companies abroad to manufacture technology products using US tools to apply for a US license before shipping to Russia.

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A similar restriction was first applied in recent years to companies shipping goods to Chinese tech giant Huawei, and it has done very well.

Emily Kilkris, senior fellow at the Center for a New American Security and former deputy assistant US trade representative, said the restrictions would freeze Russian technology to what it is today. “It will not be possible to introduce new technologies into the country,” she said. William Reinsch, a trade expert at the Center for Strategic and International Studies and a former official at the Department of Export Trade, expects the impact to slowly mount. “They will eventually feel the effects, but they may not last for months,” he said. The restrictions and sanctions are not as comprehensive as US trade measures against Iran and North Korea, but they could have larger global repercussions because Russia is more closely connected to the global economy.

Reuters interviewed six experts in the field of US commercial law. Lawyers have asked several companies to suspend sales to Russia as a precaution. Dan Goren, partner at law firm Wiggin and Dana, said one of its customers in electronics halted deliveries to the Russian distributor on Thursday, February 24.

According to the US statistics, the value of US exports to Russia last year was limited to about 6.4 billion dollars, and machinery and vehicles were the main categories in recent years. For example, the Semiconductor Industry Association (SIA), which represents US chip makers, noted that “Russia is not a significant direct consumer of semiconductors,” and that Russia’s spending on communications and technology “is only about $25 billion out of a multi-billion market.” global” in 2019.

However, many products manufactured in Asia and destined for Russia contain chips made from American tools. Most European Union countries, as well as the United Kingdom, Canada, Japan, Australia and New Zealand, impose similar export restrictions to limit Russia’s options.

What technologies are not affected by the new restrictions?

The measures include exceptions for consumables such as home electronics, humanitarian items, and technology essential for aviation safety. Mobile phones are allowed as long as they are not sent to employees of the Russian government or some affiliate company.

Nor has consumer encryption technology been restricted, as one lawyer described as a sign that the United States and its allies are reluctant to disrupt the work of protesters and the media.

Kilkris said South Korea was not included among the countries cooperating on the rules, and its help would be essential in preventing Russia from accessing chips coming from there.

A senior administration official acknowledged Thursday that more countries are expected to join the agreement. South Korea has said it will join unspecified multilateral economic sanctions against Russia in response to its military actions in Ukraine, but it is not considering unilateral measures. Read more

What companies can benefit from the new rules?

Kilcreaser and legal experts speculate that Chinese tech companies may look to fill the void created by restrictions on Western tech companies, although Kilcreaser said it would be dissuaded by US regulations. However, a senior US administration official said China is unable to meet Russia’s major military needs, especially for its more advanced integrated circuits.

Source: Reuters