"Russia Circumvents US Semiconductor Sanctions via Maldives Resort... Concerns Over Sanctions Loophole"

Nikkei "Imports Increased After Ukraine Invasion"
Seemingly Using Transshipment Method Without Customs Clearance

According to a report by Japan's Nihon Keizai Shimbun on the 21st, Russia, which has been under Western sanctions since its invasion of Ukraine last year, is using the Maldives, a resort destination, as a bypass route to import large quantities of American semiconductors.

Nihon Keizai obtained Russian customs data for one year before and after Russia's invasion of Ukraine in February last year from the Indian research firm Export Genius. Their investigation into records of American semiconductor imports exceeding $50,000 (approximately 64 million KRW) per transaction revealed that imports of American semiconductors from the Maldives increased significantly after the invasion.

During the one year following the Ukraine invasion, the top destinations for American semiconductor imports by value were China (including Hong Kong), Turkey, and then the Maldives, Nihon Keizai reported. The value of American semiconductors headed to the Maldives amounted to $53.6 million, and the number of transactions was the second highest after China. Nihon Keizai stated, "Records from the one year before Russia's invasion of Ukraine show that under the same conditions, there was not a single transaction of American semiconductor imports through the Maldives."

According to the customs data, Mykains Corporation, headquartered in the United Kingdom, exported American semiconductors to Russian companies 320 times using the Maldives as the shipping origin since August last year. The export value was about $40 million, accounting for approximately 80% of the confirmed transaction amount. This company is also suspected of having exported electronic devices worth $1.2 billion to Russia in April.

Additionally, Pixel Devices, based in Hong Kong, exported American semiconductors worth about $6 million from the Maldives to Russia between May and August last year. The company told Nihon Keizai, "We comply with the laws applicable to Hong Kong companies and believe that all transactions do not violate regulations."

Nihon Keizai sees the trade brokerage business as the reason why the Maldives has become a semiconductor supply source for Russia. The Maldives has brokerage businesses that receive cargo from certain countries and then re-ship it by air or sea.

The brokerage business operates in two ways. One is the 're-export' method, where cargo is unloaded at a port or airport, goes through customs procedures, and is then transferred by ship or plane to another country. The other is the 'transshipment' method, where cargo is transported directly to another country without customs clearance. It is estimated that most American semiconductors headed to Russia went through the transshipment method.

Nihon Keizai believes that the close economic relationship between Russia and the Maldives made this situation possible.

The Maldives' core industry is tourism. Russians make up the largest proportion of tourists visiting the Maldives. From January to March this year, 65,000 Russians visited the Maldives for tourism, the highest number by country. Since the Ukraine invasion, the Maldives has also attracted attention as a refuge for superyachts owned by Russian oligarchs.

Nihon Keizai stated, "We asked the Maldives government several times about this matter but did not receive a response."

This content was produced with the assistance of AI translation services.