Hong Kong firms among hundreds hit with US sanctions for supporting Russia’s ‘war economy’
Hong Kong Free Press
At least 21 Hong Kong-based companies and four people associated with them were among hundreds hit by new US sanctions aimed at cutting off Russia’s access to international materials and equipment amid Moscow’s war in Ukraine.
The US Department of Treasury and Department of State on Wednesday announced sanctions on more than 300 targets in countries including Russia, China, and the United Arab Emirates, as well as individuals and firms based in Hong Kong.
The US authorities said the move raised the stakes for financial institutions that continued to do business with Russia.
“We are increasing the risk for financial institutions dealing with Russia’s war economy and eliminating paths for evasion, and diminishing Russia’s ability to benefit from access to foreign technology, equipment, software, and IT services,” US Secretary of the Treasury Janet Yellen said.
See also: Hong Kong firm among 9 hit by US sanctions over allegedly procuring electronics for Russian weapons
Washington’s move also took aim at Russia’s offshore financial system and what it said were a dozen transnational networks that supported Russia’s warfare, such as by selling Russian-origin gold and procuring microelectronics.
Among the Hong Kong residents named was Russian national Alexey Chichenev, who the US Treasury Department said managed a “large-scale microelectronics procurement network” in the city, shipping “millions of dollars’ worth of electronic integrated circuits and other high-priority technology items to Russia.”
Five Hong Kong-based companies the US authorities said were associated with Chichenev were also included on the list.
A person named Mu Xiaolu, said to be a key figure in a gold laundering network for Russia, and multiple Hong Kong-based trading companies also appeared on the list.
The US Treasury Department said Mu engaged in a “complex, multi-layered laundering scheme whereby payments from the sale of Russian-origin gold were converted into fiat currency and cryptocurrencies.”
A Google search of the name returned results that suggested Mu was a director at VTB Capital, a top Russian investment bank which has an office in Hong Kong – also designated as a sanctions target by the US.
The other Hong Kong-based companies were said to have helped Russian companies evade or circumvent existing sanctions that restricted the flow of critical technology and equipment into the country.
That included 3NOD Digital Hong Kong which was involved in the supply of over US$1 million worth of high-priority items, including semiconductors to Russian companies, according to the State Department statement on Wednesday.
Washington also broadened its definition of Russia’s “military-industrial base” to include all persons already hit by sanctions under an executive order that targeted Moscow’s war in Ukraine.
The change means that foreign financial institutions would be at risk of US sanctions for conducting transactions involving any blocked person or designated Russian banks such as VTB and Sberbank.
Being sanctioned by the US effectively bars the person or the entity from doing business with customers and suppliers in the US and, in some case, from accessing the US financial system.
The news came ahead of the G7 summit in Italy this week, when world leaders are expected to discuss Ukraine and the Israel-Hamas war.
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