Traders in Hong Kong and mainland China are supplying Russia’s war machine with European electronics and military technology, exploiting loopholes in international sanctions, according to a new report.
Loopholes in Sanctions Allow Tech to Reach Russia
Researchers at the Committee for Freedom in Hong Kong Foundation found that merchants, who have not been sanctioned, have enabled hundreds of semiconductors, sensors, electrical connectors, microchip components, and other devices produced by Western firms to reach the battlefield in Ukraine. These products, including those designed by Dutch NXP Semiconductor and German Infineon Technologies, have both civilian and military applications, being used in items like cars, and drones.
“European components remain deeply embedded in Russia’s weapons systems and military infrastructure, often routed through the same small group of repeat Hong Kong intermediaries,” the researchers found.
Samuel Bickett, a human rights lawyer who co-authored the report, stated that the findings demonstrate that sanctions are not as effective as they could be. He explained that “Ukraine’s allies have failed to coordinate on which suppliers of these components to sanction, and haven’t moved quickly enough or reached broadly enough into these international transshipment networks to prevent these components from reaching the Russian military.”
NXP and Infineon stated that they comply with the law and have measures in place to ensure compliance with sanctions. Infineon acknowledged that monitoring the resale of a product throughout its entire lifecycle is “extremely challenging.”
The report highlights weaknesses in the sanctions regime imposed by many democratic governments following Russia’s invasion of Ukraine in 2022. While the European Commission targeted individuals and firms accused of financing the war, and international agreements aimed to disrupt military technology procurement, the Hong Kong government stated it would only enforce sanctions imposed by the United Nations.
Hong Kong as a Key Transshipment Hub
The researchers identified seven Hong Kong and China-based traders shipping military-apply technology—produced by over 20 manufacturers in Switzerland, the Netherlands, France, Germany, the U.K., and Poland—to Russian importers, including sanctioned entities. This activity occurred without attracting scrutiny from international authorities.
Some Hong Kong traders, controlled by Russians, bypassed checks by selling Western technology manufactured in Asia or Northern Africa, according to the report.
Woeroon Electronic Sourcing Ltd. (and its Shenzhen sister company) was identified as a key intermediary, transferring goods worth nearly $28 million between 2022 and 2024. Woeroon is currently not sanctioned by any government.
The report is part of a series exposing how Hong Kong has become the “single largest global transshipment node” for procuring billions of dollars-worth of Western technology for Russia, Iran, and North Korea.
The researchers recommended that democratic countries adjust their sanction strategy by targeting individual businesspeople and blocking them from forming new companies. They also urged Western governments to enforce existing sanctions laws and consider adding Hong Kong to the list of high-risk jurisdictions that facilitate financial crimes.
The researchers concluded that European countries cannot effectively stop the flow of these goods by focusing solely on export controls within their own borders. They believe the “decisive levers” lie in regulations imposed on European firms regarding their global manufacturing, distribution, and compliance practices.
Frequently Asked Questions
What did the report find?
The report found that traders in Hong Kong and mainland China are supplying Russia’s war machine with European electronics and military technology, exploiting loopholes in international sanctions.
What is Woeroon Electronic Sourcing Ltd.’s role?
Woeroon Electronic Sourcing Ltd. (and its Shenzhen sister company) was identified as a key intermediary in the transfer of goods worth nearly $28 million between 2022 and 2024, and is not currently sanctioned by any government.
What did the EU’s sanctions envoy say about sanctions?
The EU’s sanctions envoy, David O’Sullivan, said that while evasion persists, the sanctions against Russia have proven effective in crippling its economic and military power, and that many countries outside the EU are helping the efforts.
Given these findings, what further steps might international governments take to close the loopholes allowing technology to reach Russia?
