Reported by Bloomberg News
For years, Artem Uss had appeared in Russian media as the owner of fancy real estate, luxury cars and Italian hotels. Now US officials allege he’s at the center of a suspected secret supply chain that prosecutors say used American technology to support President Vladimir Putin’s war in Ukraine.
Court documents from the Uss case and others like it show how Russia allegedly built a secret pipeline for years before the war to ensure the supply of semiconductors to the country despite US controls. Those well-honed tactics are now helping Russian operators rebuild dismantled networks and deceive publicly listed US tech companies, according to customs data, indictments and people familiar with the matter, who weren’t authorized to speak to the media.
American prosecutors haven’t identified the semiconductor manufacturers who may have sold to Uss’s team unwittingly, and he is now under house arrest in Milan.
Even so, US and EU officials say that Russia is still able to get chips and technology for military use through other networks. Customs data analyzed by the British think tank Royal United Services Institute and seen by Bloomberg also show that semiconductors made by large companies including Analog Devices Inc., Texas Instruments Inc., and Microchip Technology Inc. have been getting to Russia via third-party firms in other parts of the world for months after the war started. The companies say they follow the law, don’t sell to Russia and they haven’t authorized the sale of their products there.
Semiconductors are becoming increasingly important to the outcome of the war. Russia has been ramping up its push to get chips, suggesting its stockpiles aren’t deep enough and Moscow’s efforts are unlikely to have resolved shortages, said Maria Shagina, a sanctions expert at the London-based International Institute for Strategic Studies.
In addition to Uss, the US charged six other individuals in October, including Yury Orekhov, whom it identified as a former employee at a Russian aluminum firm. Lawyers for Orekhov didn’t respond to a request for comment.
The team “engaged in a variety of activities in violation of US laws and regulations sanctions, including the unlawful export of millions of US dollars in military and sensitive dual-use technologies from the United States to Russia, and the use of the US financial system to smuggle millions of barrels of embargoed oil from Venezuela,” the charges said.
They used fake purchase orders, business records and shipping documents to fool American chipmakers, the court documents allege. All that helped mask the end user: The Russian military, according to prosecutors. Illicit deliveries continued after Russia’s Feb. 24, 2022 attack on Ukraine, at least until the end of March that year, prosecutors said. Components made by several of the US companies were found in seized Russian weapons platforms in Ukraine, the charges said.
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