US arrests businessman who supplied chips to Russia

The United States has arrested a businessman who was supplying American chips and other high-tech products to Russia in violation of sanctions. He faces up to 20 years in prison.

Ilya Kahn, 66, supplied dual-use goods to the Electronic Computing and Information Systems Research and Production Center (ELVIS), which is one of the leading chip design centers in Russia.

He did this, in particular, after the United States imposed sanctions against the ELVIS Research and Development Center, which, according to them, cooperates with the FSB, The Jerusalem Post reports.

According to a joint investigation by the Ministries of Justice and Commerce, Kahn sent thousands of microcontrollers, network boards, and a radio frequency transmitter to the ELVIS Research and Development Center through his two American companies, Senesys Incorporated and Sensor Design Association, which are engaged in "security software development."

He had worked with the Russian organization before the war in Ukraine, but continued to cooperate after the organization was sanctioned in March 2022 for its role in facilitating Russia's invasion of Ukraine.

According to the indictment, Kahn used the services of a Hong Kong shipping company to circumvent the ban. When it became problematic to purchase goods banned for export to the United States, he continued to supply Taiwanese-made semiconductors to the ELVIS Research and Production Center. After the Taiwanese company refused to sell them to Russia, Kang devised a plan to ship the components to the United States and then re-export them to Moscow.

"Kang also used Hong Kong and other locations around the world as transshipment points to circumvent U.S. export regulations and conceal the ultimate Russian recipients," the indictment says.

The Department of Justice will "vigorously" punish violations of sanctions and US export control laws, assistance to Russia and other hostile countries, the statement said.

Background. As a reminder, the President's Office reported that in 2023, Western companies supplied Russia with critical components worth $2.9 billion in circumvention of sanctions. Experts have called on the West to tighten export controls to cut off supply channels to Russia.