Chinese tech firms see warning shot from US sanctions on Singaporean firm, but enforcement could be challenging
- With fresh US sanctions last week on 21 entities, including a Singaporean electronics wholesaler, risks to Chinese firms over exposure to Russia are increasing
- The US still relies on fear and self-enforcement, experts say, as China is not collaborative with sanctions enforcement
The latest sanctions from the US covering a number of businesses for their ties to Russia following its invasion of Ukraine, including a Singaporean entity, acts as a warning shot to Chinese businesses with exposure to the market, analysts say.
The US Treasury Department on Thursday imposed fresh sanctions on 21 entities and 13 people, including Joint Stock Company Mikron, Russia’s largest chip maker, and Alexsong Pte Ltd, a Singapore-based telecoms electronics wholesaler that allegedly facilitated transactions that helped Russia evade sanctions.
“We will continue to target Putin’s war machine with sanctions from every angle until this senseless war of choice is over,” Secretary of the Treasury Janet Yellen said in a statement on Thursday.
The sanctions freeze all US assets of the targeted entities and individuals, and generally ban American companies from trading with them.
The inclusion of Singapore-based Alexsong, which boasts “29 years of expertise in the wholesale market”, is significant, as it represents a potential “secondary sanction risk” that many Chinese businesses are trying to manage. The US government has also warned that Chinese companies could be sanctioned if they are found to be helping Russian partners to skirt sanctions.