Japan is joining its Western partners in sanctioning a Kazakh-registered company for supplying microchips to Russia that have military applications.
The penalty imposed on the Kazakh entity, Da Group 22 LLC, was part of a broader round of sanctions announced by the Japanese government on January 10 designed to curtail Russia’s ability to maintain its war effort in Ukraine. Overall, Japan added 22 Russian organizations and 31 companies from other countries to its sanctions list.
Japanese authorities also added over 300 objects – including engine components for cranes and motorbikes, as well as chemicals potentially useful for the development of chemical weapons – to the list of items prohibited for export to Russia.
Da Group 22 was registered in Astana in March 2022, just weeks after the Russian unprovoked attack on Ukraine. The entity has engaged in “wholesale [distribution] of electronic and telecommunication equipment and spare parts for it,” according to an online register of contractors. The US Treasury Department designated Da Group 22 for sanctions in February of last year; the European Union followed suit last June.
An investigative report published by the Kazakh outlet, Vlast.kz, showed that Da Group 22 funneled dual-use microchips to Russia via convoluted routes that passed through Europe. Trade statistics help shed light on the scale of the operation: in 2021, $35 million worth of components was imported to Kazakhstan, and in 2022, the total value of the same type of components more than doubled, exceeding $75 million. Over the same period, the value of microchip exports from Kazakhstan to Russia skyrocketed from $245,000 to $18 million.
Despite sanctions, Da Group 22 remains in business and Kazakh authorities aren’t showing an inclination to penalize it. A report distributed by the Kazakh news website Informburo.kz quoted a Finance Ministry official as saying the violation of sanctions is not a reason for authorities to force the liquidation of a private enterprise. Kazakh officials have maintained they are complying with Western sanctions, but explain that, given the longstanding trade connections between Russia and Kazakhstan, enforcement is difficult.
“Kazakhstan has historical ties with both Russia and Ukraine. Our economies have been interconnected for a long time and it is for this reason that this situation is very difficult for us and for our economy,” then-foreign minister Mukhtar Tleuberdi told reporters in February 2023. “Kazakhstan is a member of the Eurasian Union [trading bloc], we do not have any customs borders between Kazakhstan, Russia and other members of this union.”
Japan is striving to increase its political and economic profile in Central Asia. Last August, Japanese government officials and business leaders presided over the inaugural Central Asian + Japan summit in Astana, signaling Tokyo’s growing interest in regional trade and investment. The gathering featured the announcement of an economic assistance package worth roughly $2 billion to support development of the region’s green energy and digital technology sectors. On the sidelines of the meeting, Japan’s Bank for International Cooperation signed individual development agreements with Kazakhstan and Uzbekistan.
By Almaz Kumenov via Eurasianet.org
