Chinese companies not to comply with foreign sanctions it deems unjustified, though so far Beijing hasn’t issued any such noncompliance orders.
Western sanctions include strict controls that block exports to Russia’s defense sector and the export of products made using U.S. equipment, software or blueprints, even when those products are made by non-U.S. companies. The measures have proven especially effective in the technology sector, whose complex global supply chains offer numerous levers for the U.S. government to pull.Despite the wide-ranging nature of the sanctions, some items have been able to slip through.
If a Chinese PC company were cut off from a key chip supplier, “that would be catastrophic,” said Steve Brazier, chief executive of market research firm Canalys. “You can understand why they might be motivated not to get caught by that.” Although U.S. sanctions contain carve-outs for some consumer electronics devices, they must be sold directly to nongovernmental organizations or consumers for the exports to be permitted, said Kevin Wolf, a former Commerce Department official and a partner in Akin Gump Strauss Hauer & Feld LLP. Most major tech vendors sell their products via third-party distributors and retailers on the ground.
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