Huawei faces dilemma over ties with Russia that could lead to further US sanctions

The last time Western sanctions hit Russia after it annexed Crimea, President Vladimir Putin asked Huawei to restore and upgrade the territory’s communications infrastructure. Now a controversial Chinese tech company is ready to help the Putin regime on a much larger scale, despite the threat of new sanctions from Washington.

In Crimea, Russia “pulled out Western telecommunications equipment in heavily militarized territory and replaced it with Huawei and ZTE,” said Hosuk Li-Makiyama, a telecommunications expert at the European Center for International Political Economy. According to him, if Nokia and Ericsson completely withdraw from Russia, Moscow will “more than ever need Chinese companies, especially Huawei.”

Despite an initial slump in phone shipments, Huawei benefited early from the war in Ukraine. Sales of the company’s phones in Russia surged 300% in the first two weeks of March, while other Chinese brands Oppo and Vivo also recorded triple-digit sales growth, according to analysts at MTS, Russia’s largest mobile operator.

Four Russian research centers are recruiting dozens of engineers, including machine learning specialists in Novosibirsk, speech recognition researchers in St. Petersburg, and big data analysts in Nizhny Novgorod. Huawei has also opened up new sales and business opportunities in Moscow since the invasion of Ukraine began, according to its website.

But experts say Chinese tech companies like Huawei and rival Xiaomi risk violating sanctions if they continue to ship phones and telecommunications equipment to Russia. They need Washington’s approval because the electronics often contain high-end semiconductors or are made using US equipment, making them the target of new sanctions against Moscow.

Huawei could face new sanctions from Washington, such as Trump’s order to ban ZTE from any U.S.-related technology, which would deal another big blow to the Chinese company’s operations.

“My bet is that [Huawei and other Chinese phone makers] will not be able to legally export to Russia,” said Kevin Wolf, a former Commerce Department official and sanctions expert.

“It is theoretically possible that [Huawei] could figure out how to make a cell or a base station without American tools, software, etc. But it’s hard to believe that they can find all the [semiconductors] that haven’t been made. with American instruments.