What Indian companies have the United States sanctioned, and why? What does it mean to’ sanction’ a company or a nation? We clarify. Four Indian companies were among the approximately 400 organizations and individuals sanctioned by the US on Wednesday, October 30, for aiding Russia’s military activities in Ukraine.
According to a US State Department statement, “the United States is today sanctioning nearly 400 entities and individuals for enabling Russia’s prosecution of its illegal war.”
What Indian companies have the United States sanctioned, and why? What does it mean to “sanction” a company or a nation? We clarify.
Approved Indian companies
Ascend Aviation India Private Limited, one of the Indian companies included in the US State Department letter, “sent over 700 shipments to Russia-based companies” between March 2023 and March 2024. The US State Department noted, “These shipments included over $200,000 worth of CHPL items, such as US-origin aircraft components,” and identified its directors.
The Common High Priority List is known as CHPL. The Bureau of Industry and Security (BIS), which developed this list, said that “some items are more significant to Russian weaponry than others.” 50 goods that Russia wants to acquire for its weapons projects are on the Common High Priority List (CHPL), which BIS created in collaboration with the European Union, Japan, and the United Kingdom.
Additionally, the United States identified Mask Trans as “an Indian company involved in the supply of over $300,000 worth of CHPL items such as aviation components to Russia-based and U.S.-designated S 7 ENGINEERING LLC from June 2023 to at least April 2024.”
TSMD Global Private Limited, the third Indian business, “shipped at least $430,000 worth of CHPL items to Russia-based companies…”Electronic integrated circuits, central processing units, and other fixed capacitors were among the BIS CHPL Tier 1 and 2 articles shipped between July 2023 and March 2024 and were of U.S. and EU origin.
Additionally, it stated that “Futrevo is an Indian company involved in the supply of over $1.4 million worth of CHPL items such as electronic components” to SMT-ILOGIC. This Russian company manufactures Orlan drones. “The shipments took place between January 2023 and February 2024 at the latest.”
Economic sanctions: what are they?
In essence, sanctions limit or eliminate the economic ties between the party imposing the restrictions and the target of the sanctions. Sanctions may include prohibitions on imports or exports, commerce, asset freezes, prohibitions on utilizing a nation’s or a group of nations’ financial institutions and currency, etc.
The Council on Foreign Relations states that “sanctions can be targeted, preventing transactions by and with specific companies, organizations, or individuals, or they can be comprehensive, banning commercial activity with regard to an entire country, like the long-standing US embargo of Cuba.”
For instance, the United States has placed sanctions on several nations, such as China, North Korea, Iran, and others. Russia is now the most sanctioned nation in the world following the start of the conflict in Ukraine.
After being authorized by the Security Council, the UNO also applies economic penalties in addition to those on specific nations. Sanctions can also be imposed by the European Union (EU).
The effectiveness of sanctions has been disputed, even though they serve as a kind of punishment or pressure on the nation or organization to whom they are imposed, with the idea being that financial losses will compel it to reevaluate its actions. According to critics, targets may readily discover methods to get around sanctions, and implementing them harms the opposing party.
For instance, other nations like China and India still trade with Russia, demonstrating that harsh Western sanctions have not destroyed its economy. Individual member nations are left to execute sanctions imposed by international organizations such as the UN, which lack the resources to do so. Additionally, if a nation were to prohibit imports from other nations, its sectors that require the imported raw materials would suffer.
