Russia buys tens of millions of dollars worth of semiconductors through the Maldives

The Maldives took second place after China in terms of semiconductor supplies to Russia, Nikkei Asia learned. A small island state in South Asia, famous for its luxurious holidays in resorts, a year after the beginning of the Ukrainian conflict, it became Russia’s main trading partner. Around 400,000 semiconductors worth $53.6 million were shipped via the Maldives to Russia during that time, the publication claims, citing Russian customs data obtained from the Indian research firm Export Genius. They consider shipments worth at least $50,000, representing 19% of the Maldives’ total goods exports in 2021, which the United Nations estimated at $280 million.

With this result, the island state turned out to be the second supplier of semiconductors to Russia after China, after including Hong Kong, although a year earlier it practically did not supply these products. This is especially surprising since the semiconductor market in the Maldives does not exist at all, said Akira Minamikawa, senior consulting director at Omdia, quoted by Nikkei Asia.

Before the “special operation”, the largest exporters of semiconductors to Russia were China, Malaysia, Taiwan, Vietnam and South Korea. The sanctions changed everything: the US, the EU and their allies banned the sale to Russia of everything that is used in the military industry, including electronics. Although China, Malaysia and Vietnam did not join the sanctions, direct shipments of electronics from there to Russia declined sharply due to fear of secondary sanctions. From the US, which was one of the top ten exporters, it came to a complete stop.

But, as Nikkei told a source in one of the transport companies, the shipment of semiconductors from the United States to Russia can be arranged if a Maldivian trading or shipping company is named as the recipient. As the publication found out, almost all electronic components came from the Maldives to Russia according to the transhipment scheme, that is, they were not cleared by the customs authorities on the island.

The US authorities have already drawn attention to the role of the Maldives in circumventing anti-Russian sanctions: in May 2022, the US Department of Commerce accused the Maldivian company Intermodal Maldives of supporting the export of aviation components to Russia.

Semiconductor shipments from the Maldives surged in May 2022 after Aeroflot resumed direct scheduled flights from Moscow to the capital Male, notes Nikkei Asia. State airline planes could become a means of transporting semiconductors.

None of the 14 companies that shipped semiconductors to Russia are based in the Maldives. Most of the chips – about $ 40 million – were sent to Russia by Mykines Corp., registered in London. According to the Financial Times, by April 2023, the company had supplied electronics worth $1.2 billion to Russia. Hong Kong-based Pixel Devices ranks second among importers. Her representative confirmed that she is working with Russian clients, but stressed that all her actions are strictly in accordance with Hong Kong law and do not violate anything.

Semiconductors and microchips are the only commodities with a commodity code whose shipments to Russia have not decreased, but have even increased since the sanctions were imposed, according to a study by a group of scientists, also based on data from the Russian customs service. “They represent only 1% of the total value of Russian imports, but they are crucial to some industries, including military applications,” their article said. Researchers noted in another study that for the entire 2022, imports of microprocessors and semiconductors to Russia increased from $ 1.82 to $ 2.45 billion.