Last month, a North Korean ballistic missile that was fired by the Russian military in Ukraine was found to have contained hundreds of components that were traced back to companies in both the U.S. and Europe, according to a report.
The report, published online by Conflict Armament Research, determined that the missile was produced by the Democratic People’s Republic of Korea (North Korea) and included more than 290 non-domestic electronic components. The CAR report found that more than 75% of those components were designed and sold by U.S.-incorporated companies.
In another report from 2023, CAR determined that 82% of components that were found inside an Iranian-made drone, fired by Russia inside of the Ukraine, were made by US-based companies.
Sanctions, Acquisitions, and U.S. Adversaries
So how are these components being acquired?
According to GlobalAffairs.Org, the U.S. has sanctions in place against more than 20 countries which include Afghanistan, Iran, Nicaragua, North Korea, and many more. There are even more sanctions against specific non-state groups such as Transnational Criminal Organizations and even Rough Diamond Trades.
Since February 2022 and Russia’s invasion of Ukraine, sanctions have expanded greatly.
The International Trade Administration continues to urge U.S. exporters to ‘consider conducting due diligence’ for all transactions involving Russia and Russian entities, and that even sanctions against Russian banking and financial sectors have greatly complicated payments. But components are still getting out there.
National Security Impacted
As recent as February 14, the Department of Treasury’s Office of Foreign Assets and Control sanctioned a network responsible for facilitating the illegal exports of goods and technology from over two dozen U.S. companies to groups in Iran.
Among the goods and technology acquired by CBI were items classified as information security items subject to national security and anti-terrorism controls by the U.S. Department of Commerce’s Bureau of Industry and Security, according to a report by the DoT.
“The Central Bank of Iran has played a critical role in providing financial support to the IRGC-QF and Hizballah, two key actors intent on further destabilizing the Middle East,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson. “The United States will continue to use all available means to disrupt the Iranian regime’s illicit attempts to procure sensitive U.S. technology and critical inputs.”
In November, several Brooklyn residents were charged with sending prohibited electronics, worth millions of dollars, from the U.S. to be used in missiles and tanks for the war in Ukraine.
The members of the smuggling ring shipped items to Turkey, Hong Kong, India, China, and the United Arab Emirates, where they would be forwarded to Russia. The smuggling group, comprised of at least seven people, was accused of sending about 300 separate shipments intended for the battlefield.
The Department of Commerce said the components were “of the highest concern due to their critical role in the production of advanced Russian precision-guided weapons systems.”
Stopping MilTech from Getting to Adversaries
But what is being done to stop these components from getting out?
Last year, in an effort to counter the smuggling of advanced technologies being used by US adversaries, the Departments of Justice and Commerce, alongside the FBI and DHS, launched the Disruptive Technology Strike Force.
According to a press release from the DoJ, the agencies comprising the Strike Force have taken an all-tools approach to aggressively pursue enforcement actions against illegal procurement networks and prevent nation-state actors from illicitly acquiring our most sensitive technologies.
In the last 12 months, “the Strike Force has charged 14 cases involving alleged sanctions and export control violations, smuggling conspiracies and other offenses related to the unlawful transfer of sensitive information, goods, and military-grade technology to Russia, China, or Iran.”
Other cases include:
- Seven cases charged defendants with sending or attempting to send semiconductors, microelectronics, or other tech to Russia.
- Jan 2024, Brooklyn and LA-based smuggling ring arrest for the unlawful export of hundreds of thousands of semiconductors to a sanctioned Russian business using Chinese networks and other transshipment points to evade export controls.
- Two cases in Oct 2023; Brooklyn residents arrested in smuggling scheme of semiconductors to Russia.
- Sep 2023, Russian citizen was charged with using Hong Kong shell companies to smuggle microelectronics into Russia
- Aug 2023, arrest of Russian-German citizen in Cyprus involving a scheme to procure US-sourced microelectronics for the Russian military.
- In May 2023, two more cases of Russian and Greek nationals obtaining tech for Russian use, including nuclear weapons testing materials.
“Illegally exporting sensitive technology is not an abstract economic concern — it is a crime with a direct impact on the safety of the American people,” said FBI Deputy Director Paul Abbate. “To be clear, adversaries are directly threatening our national security. These crimes have the potential to destabilize American economic security, negatively impact American businesses, and affect employment. The FBI looks forward to amplifying our collective capability to combat the threat through this strike force — a partnership that will serve as a force multiplier to the work involving each participating agency.”
Impact of Smuggling U.S.-based Tech
The smuggling of U.S.-based tech is not just a monetary crime; it is about safety and stabilization.
“When acquired by nation-state adversaries such as the People’s Republic of China, Iran, Russia, and North Korea, advanced technologies can be used in new or novel ways to enhance their military capabilities or support mass surveillance programs that enable human rights abuses,” the DoJ stated. “End users of national security concern seek technologies, including those related to supercomputing and exascale computing, artificial intelligence, advanced manufacturing equipment and materials, quantum computing, and biosciences. Although they have important commercial uses, technologies in these fields can threaten U.S. national security when used by adversaries for disruptive purposes, such as improving calculations in weapons design and testing; improving the speed and accuracy of military or intelligence decision-making; and breaking or developing unbreakable encryption algorithms that protect sensitive communications and classified information.”
“The Disruptive Technology Strike Force takes aim at those who imperil our national security and the rule of law by illegally transferring sensitive technologies to foreign adversaries,” said Assistant Attorney General Matthew G. Olsen. “We must remain vigilant in enforcing export control laws, which defend military readiness, preserve our technological superiority over our adversaries, and help to protect human rights and democratic values.”
“Advances in technology have the potential to alter the world’s balance of power,” said Assistant Secretary for Export Enforcement Matthew S. Axelrod. “This strike force is designed to protect U.S. national security by preventing those sensitive technologies from being used for malign purposes.”
The strike force’s work, according to the DoJ, will focus on investigating and prosecuting criminal violations of export laws; enhancing administrative enforcement of export controls; fostering partnerships with the private sector; leveraging international partnerships to coordinate law enforcement actions and disruption strategies; utilizing data analytics and intelligence to build investigations; conduct training for field offices; and strengthen connectivity between the strike force and the Intelligence Community.
“HSI remains committed to our interagency partners and will continue to work tirelessly on behalf of the American people to ensure sensitive technologies and proprietary information do not fall into the hands of our adversaries,” said Acting Executive Associate Director Steve Francis of Homeland Security Investigations.
