Taiwan not exporting machine tools to Russia: Economics Ministry

Taipei, Nov. 1 (CNA) Taiwan has not recorded any exports of machine tools to Russia since it updated a list of restricted items in March in line with international export sanctions put in place over the invasion of Ukraine, the Ministry of Economic Affairs said Friday.

The list of goods banned for export to Russia was updated on March 8 and added 77 categories of machine tool-related items according to the Harmonized System (HS) codes used in global trade, the ministry said in a statement.

With local businesses' cooperation, Taiwan has not recorded any exports of the sanctioned goods that fall under the category of machine tools since then, the ministry said.

The ban on machine tool exports to Russia as well as Belarus has been introduced because the equipment can be used by the military to manufacture artillery, according to the ministry.

For violators of the ban, the fine they face for breaking export sanctions has been raised to NT$1 million (US$31,342) for first-time violators, the ministry said.

The ministry made the statement in response to a recent report published regarding Russia's artillery supply chain by the Royal United Services Institute for Defence and Security and the Open Source Centre in the United Kingdom on Oct. 15.

The report of over 60 pages is titled "Ore to Ordnance: Disrupting Russia's Artillery Supply Chains," and the words Taiwan or Taiwanese was mentioned eight times.

One section of the report highlighted China's role as a re-export hub of sanctioned machine tools manufactured by a coalition of countries that introduced sanctions on Russia.

Citing data the two organizations compiled, the report stated that at least 2,113 companies supplied machine tools produced in Western countries to Russia in 2023 and during the first three months of 2024.

Among these companies, 26.16 percent were Turkish and 17.5 percent were Chinese.

"The rest of the suppliers originate from Germany (8.50 percent), South Korea (6.75 percent), Taiwan (6.08 percent), Italy (5.92 percent), the UAE (4.63 percent), Lithuania (2.47 percent) and Serbia (2.21 percent)," the report said.

The report also said Chinese companies accounted for 41 percent of Japanese machine tool products exported to Russia, 26 percent of Taiwanese products and 19 percent of South Korean products.

Yet, only five of the 36 top Chinese companies supplying Russia with machine tools have been sanctioned by the coalition of countries condemning the Russian invasion of Ukraine that began in February 2022, according to the report.

Chinese subsidiaries of 10 companies from the coalition of countries are listed in the report because their sales to Russia exceeded US$800,000 in 2023 and during the first three months in 2024.

Three of the 10 companies in China were set up by Taiwanese firms, two each by businesses based in South Korea, Germany and the United States, and one in Japan, the report showed.

The ministry did not comment on individual companies, stating only that 19 meetings have been held with Taiwanese businesses this year to update them on the latest international rules as part of efforts to prevent the sale of sanctioned items to Russia.

Taiwan's government will adjust sanctions in response to global developments, while working with like-minded countries to crack down on illegal trade, the ministry said.

(Bu Liu Chien-ling and Kay Liu)Enditem/ls