A US grand jury last week released a 52-count criminal indictment charging two men with illegally smuggling restricted microchips into Russia.
Though the electronics are perfectly legal and have civilian applications, the US government bars their export to certain countries because they can also be used for military purposes, including in ballistic weapons guidance systems and aircraft avionics.
Foreign intelligence services are increasingly engaging in industrial, technological, and scientific espionage in addition to the traditional pursuit of government secrets, says Janosh Neumann, a former officer with Russia’s Federal Security Service (FSB) who fled to the US in 2008. It is much cheaper to swipe someone else’s already developed technology than to create it yourself.
“It’s a non-stop conveyor process,” Neumann tells Quartz. “Searching, buying, stealing new tech stuff from the US. It’s literally unstoppable.”
Limiting certain exports is key to constraining the weapons programs of adversarial nations, say experts. Restricted dual-use items can range from industrial centrifuges to swimming pool chlorine, the chemical used by Syrian dictator Bashar al Assad in deadly barrel bombs aimed at his own people.
The US State Department says these restricted items can be exported within specific parameters, but the end users must first be approved by American officials to prevent weapons proliferation and terrorism.
Over the past year or so, American courts have sentenced people to prison terms for attempting to export restricted electronics to Russia, China, Cuba, Pakistan, and Iran. David Levick, an Australian national, was extradited to the US in December 2018 to face charges of illegally exporting restricted US-made aviation sensors to Iran. He was sentenced last week to two years in prison and ordered to forfeit the value of the goods involved in the deal, about $200,000.
These days, people tend to think of China as the main culprit when it comes to illegal technology transfer and IP theft. However, Russia has been actively going after American tech secrets since the Soviet era, says former CIA operations officer Joseph Wippl.
Serious time for a serious crime
According to a recently unsealed indictment, Russian nationals Valery Kosmachov and Sergey Vetrov, both 66, allegedly used front companies in Florida and California to ship export-controlled programmable computer chips to end users in the Russian Federation while claiming they were actually going to authorized recipients in Estonia.
The two men are charged with smuggling, international money laundering, and export violations. Kosmachov was extradited March 14 to the US from Tallinn, Estonia. Vetrov remains at large.
If convicted, they could face up to 20 years on each export violation and money laundering count, and up to 10 years for each count of smuggling.