The United States imposes sanctions on two Chinese defense technology firms in September 2022 and January 2023
Context
On September 30, 2022, the United States Treasury Department imposed sanctions on Chinese satellite technology firm Sinno Electronics Co Limited (Sinno). This followed an earlier, June 28, 2022 action in which Shenzhen-based Sinno was named on Commerce’s Entity List. By adding Sinno to the US’ Specially Designated Nationals and Blocked Persons List (SDN List), US nationals are prohibited from transactions with the firm and their properties in the US are also blocked. The Treasury Department’s Office of Foreign Assets Control (OFAC), justified this move by alleging that Sinno (and an additional Armenian firm, Taco LLC), were supplying the Russian defense procurement firm Radioavtomatika. In a press release, the Treasury Department claimed that “Sinno, with awareness of restrictions on exports to Russia, has maintained a continuing relationship with Radioavtomaika before and after Russia’s further invasion of Ukraine.”
Subsequently, on January 26, 2023, a second Chinese firm, Changsha Tianyi Space Science and Technology Research Institute (Spacety China) – and its Luxembourg-based subsidiary Spacety Luxembourg – were sanctioned by the US. As a result of the sanctions, Spacety China is blocked from receiving any transfers, payments, or imports from US-based firms. Spacety China is alleged to have supplied satellite imagery of Ukraine locations to the Russian firm Terra Tech in support of Wagner’s military efforts. A statement from US Treasury Secretary Janet L. Yellen accompanying the announcement of this and other sanctions said that the “new sanctions. . . will further impede Putin’s ability to arm and equip his war machine”.
In both cases, then, these measures were motivated by a desire to erode Russia’s defense-industrial base in the aftermath of Moscow’s invasion of Ukraine.
Impact
International media reports have not indicated if these measures have influenced the two firms’ involvement in Russia’s defence industrial base, and whether they have negatively impacted their financial performance.
Responses
ii) Chinese government and industry responses.
Sinno has not responded to requests from international media for comment. However, Spacety China did provide a statement to Chinese state media, in which it denied claims of ties to Wagner Group, saying:
“We have checked historical business and transaction records. and we, as well as our subsidiaries, have no business dealings with Russia’s Terra Tech Company and Wagner Group. We and all commercial clients have signed the ‘Commitment of Product Use’ and ‘End User Agreement’ to ensure that our products and services are intended for civilian and commercial use and do not involve any military use. We also have checked the list of end users, and did not find Terra Tech and Wagner Group. . . We are in active communication with all parties, doing our best to ensure open, fair and just treatment, and safeguard our legitimate rights and interests through lawful means. . . At the same time, we will continue to strengthen the company’s compliance review, and strongly hope to engage in dialogues with a sincere, open and transparent attitude with all parties, to resolve possible differences and misunderstandings.”
In December 2024, the Chinese Ministry of Commerce announced its own additional export control measures on the export of dual use items to the US, including (a) prohibiting the export of dual use items to US military, (b) prohibiting the export of dual use items relating to gallium, germanium, antimony and superhard materials to the US, and (c) implementing stricter reviews on the export of dual use items relating to graphite to the US. This decision was made pursuant to the Export Control Law of the People’s Republic of China but it was expressly stated by the Chinese Ministry of Commerce that the restrictions were made in response “to the US’s continuous abuse of export control measures, weaponisation of trade, generalis[ing of]the notion of national security, and suppression of Chinese companies”
(iii) Other states
Notably, the United Kingdom followed these measures by also announcing sanctions on Sinno in December 2023.
Status
At time of writing (September 2024) these measures appear to still be in force, as the conflict in Ukraine continues.
Reference list
Flatley, D. and I. Marlow. 2023. “US Targets Chinese Company in Broader Russia Sanctions Push.” Bloomberg. January 26. Available at: https://www.bloomberg.com/ news/articles/2023-01-26/us-targets-chinese-company-in-broader-russia-sanctions-push?embedded-checkout=true&utm_source=pocket_shared
Global Trade Alert. 2022. “United States of America: Treasury imposes sanctions on entities supporting Russia’s defence industry.” Global Trade Alert. September 30. Available at: https://www.globaltradealert.org/intervention/109383/controls-on-commercial-transactions-and-investment-instruments/united-states-of-america-treasury-imposes-sanctions-on-entities-supporting-russia-s-defence-industry
GOV.UK. 2023. “UK hits military suppliers propping up Russia’s war machine.” GOV.UK. December 6. Available at: https://www.gov.uk/government/news/uk-hits-military-suppliers-propping-up-russias-war-machine
Latham & Watkins LLP. 2022. “Sanctions Update: EU and US Impose New Sanctions and Export Controls Relating to Russia.” Lexology. October 11. Available at: https://www.lexology.com/library/detail.aspx?g=e5ccdbf0-0905-4bab-830f-acdedd739214
Ng, K. 2023. “Ukraine: US sanctions Chinese firm helping Russia’s Wagner Group.” BBC News. January 27. Available at: https://www.bbc.com/news/world-asia-china-64421915
OFAC. N.D. “Sanctions List Search: SINNO ELECTRONICS CO., LIMITED” Office of Foreign Assets Control. Available at: https://sanctionssearch.ofac.treas.gov/ Details.aspx?id=38641
Telles, A. 2023. “Here Are All The U.S. Sanctions Against China.” Forbes. February 8. Available at: https://www.forbes.com/sites/anthonytellez/2023/02/08/here-are-all-the-us-sanctions-against-china/
US Department of the Treasury. 2022. “Press release: Treasury Imposes Swift and Severe Costs on Russia for Putin’s Purported Annexation of Regions of Ukraine”, US Department of the Treasury. September 30. Available at: https://home.treasury.gov/ news/press-releases/jy0981
U.S. Department of the Treasury. 2022. “Treasury Imposes Swift and Severe Costs on Russia for Putin’s Purported Annexation of Regions of Ukraine.” U.S. Department of the Treasury. September 30. Available at: https://home.treasury.gov/news/press-releases/jy0981
US Department of the Treasury. 2023. “Treasury Sanctions Russian Proxy Wagner Group as a Transnational Criminal Organization.” US Department of the Treasury. January 26. Available at: https://home.treasury.gov/news/press-releases/jy1220
Xu, Y. 2023. “Exclusive: No business with US sanctioned company, services do not involve military use: Chinese satellite firm.” 3. January 29. Available at: