Business
U.S. Technology, a Longtime Tool for Russia, Becomes a Vulnerability

WASHINGTON — With magnifying glasses, screwdrivers and a fragile contact from a soldering gun, two males from an investigative group that tracks weapons pried open Russian munitions and gear that had been captured throughout Ukraine.
Over every week’s go to to Ukraine final month, the investigators pulled aside every bit of superior Russian {hardware} they may get their palms on, comparable to small laser vary finders and steerage sections of cruise missiles. The researchers, who have been invited by the Ukrainian safety service to independently analyze superior Russian gear, discovered that the majority of it included components from corporations based mostly in the USA and the European Union: microchips, circuit boards, engines, antenna and different gear.
“Superior Russian weapons and communications methods have been constructed round Western chips,” stated Damien Spleeters, one of many investigators with Battle Armament Analysis, which identifies and tracks weapons and ammunition. He added that Russian corporations had loved entry to an “unabated provide” of Western expertise for many years.
U.S. officers have lengthy been pleased with their nation’s capability to provide expertise and munitions to the remainder of the world. However since Russia invaded Ukraine in late February, the USA has confronted an unlucky actuality: The instruments that Russian forces are utilizing to wage conflict are sometimes powered by American innovation.
Nonetheless, whereas the expertise made by American and European corporations has been turned in opposition to Ukraine, the scenario has additionally given the USA and its allies an necessary supply of leverage in opposition to Russia. The USA and dozens of nations have used export bans to chop off shipments of superior expertise, hobbling Russia’s capability to supply weapons to interchange these which have been destroyed within the conflict, in response to American and European officers.
On Thursday, the Biden administration introduced additional sanctions and restrictions on Russia and Belarus, including 71 organizations to a authorities listing that forestalls them from shopping for superior expertise. The Treasury Division additionally introduced sanctions in opposition to a yacht-management firm that caters to Russian oligarchs.
Whereas some analysts have urged warning about drawing early conclusions, saying the measures will take time to have a full impact, the Biden administration has known as them successful. Since Western allies introduced intensive restrictions on exports of semiconductors, computer systems, lasers, telecommunications gear and different items in February, Russia has had issue acquiring microchips to replenish its provide of precision-guided munitions, in response to one senior U.S. official, who, together with most different officers interviewed for this story, spoke on the situation of anonymity to debate issues based mostly on intelligence.
On Tuesday, when requested if a chip scarcity was crippling the Russian army, Commerce Secretary Gina Raimondo, who oversees export controls, stated the reply was “an unqualified sure.”
“U.S. exports to Russia within the classes the place we have now export controls, together with semiconductors, are down by over 90 p.c since Feb. 24,” she stated. “So that’s crippling.”
The restrictions halt direct technological exports from the USA and dozens of associate nations to Russia. However additionally they transcend conventional wartime sanctions issued by the U.S. authorities by putting limitations on sure high-tech items which can be manufactured anyplace on the earth utilizing American equipment, software program or blueprints. Which means international locations that aren’t within the sanctions coalition with the USA and Europe should additionally comply with the principles or doubtlessly face their very own sanctions.
Russia has stopped publishing month-to-month commerce knowledge for the reason that invasion, however customs knowledge from its main buying and selling companions present that shipments of important components and parts have fallen sharply. Based on knowledge compiled by Matthew C. Klein, an economics researcher who tracks the impact of the export controls, Russian imports of manufactured items from 9 main economies for which knowledge is out there have been down by 51 p.c in April in contrast with the typical from September 2021 to February 2022.
The restrictions have rendered the old-school bombing runs on tank factories and shipyards of previous wars pointless, Mr. Klein wrote. “The democracies can replicate the impact of well-targeted bombing runs with the suitable set of sanctions exactly as a result of the Russian army is dependent upon imported gear.”
Russia is likely one of the world’s largest arms exporters, particularly to India, however its trade depends closely on imported inputs. In 2018, Russian sources happy solely about half of the military-related gear and providers the nation wanted, comparable to transportation gear, computer systems, optical gear, equipment, fabricated metallic and different items, in response to knowledge from the Group for Financial Cooperation and Improvement compiled by Mr. Klein.
The rest of kit and providers utilized by Russia have been imported, with a couple of third coming from the USA, Europe, Japan, Taiwan, Australia and different associate governments that imposed sanctions collectively on Moscow.
U.S. officers say that in live performance with all kinds of different sanctions that ban or discourage industrial relations, the export controls have been extremely efficient. They’ve pointed to Russian tank factories which have furloughed employees and struggled with shortages of components. The U.S. authorities has additionally obtained experiences that the Russian army is scrambling to seek out components for satellites, avionics and evening imaginative and prescient goggles, officers say.
Know-how restrictions have harmed different Russian industries as effectively, U.S. officers say. Gear for the oil and fuel trade has been degraded; upkeep for tractors and heavy gear made by Caterpillar and John Deere has halted; and as much as 70 p.c of the industrial airplanes operated by Russian airways, which not obtain spare components and upkeep from Airbus and Boeing, are grounded, officers say.
However some consultants have sounded notes of warning. Michael Kofman, the director of Russia research at CNA, a analysis institute in Arlington, Va., voiced skepticism about some claims that the export controls have been forcing some tank factories and different protection corporations in Russia to shutter.
“There’s not been a lot proof to substantiate experiences of issues in Russia’s protection sector,” he stated. It was nonetheless too early within the conflict to anticipate significant provide chain issues in Russia’s protection trade, he stated, and the sourcing for these early claims was unclear.
Maria Snegovaya, a visiting scholar at George Washington College who has studied sanctions on Russia, stated that the dearth of essential applied sciences and upkeep have been prone to begin being felt extensively throughout Russian trade within the fall, as corporations run out of components and provides or want repairs on gear. She and different analysts stated that even the manufacturing of day by day items comparable to printer paper could be affected; Russian corporations had purchased the dye to show the paper white from Western corporations.
“We anticipate random disruptions in Russia’s manufacturing chains to manifest themselves extra incessantly,” Ms. Snegovaya stated. “The query is: Are Russian corporations capable of finding substitutes?”
U.S. officers say the Russian authorities and firms there have been on the lookout for methods to get across the controls however have to this point been largely unsuccessful. The Biden administration has threatened to penalize any firm that helps Russia evade sanctions by slicing it off from entry to U.S. expertise.
The Russia-Ukraine Conflict and the International Economic system
A far-reaching battle. Russia’s invasion on Ukraine has had a ripple impact throughout the globe, including to the inventory market’s woes. The battle has induced dizzying spikes in fuel costs and product shortages, and is pushing Europe to rethink its reliance on Russian power sources.
In an interview final month, Ms. Raimondo stated the USA was not seeing any systematic circumvention of the export controls by any nation, together with China, which aligned itself with Russia earlier than and through the invasion of Ukraine. Corporations have been making impartial selections to not interact with Russia, regardless of the nation “attempting very arduous to get round” the worldwide coalition of allies that had imposed export controls, Ms. Raimondo stated.
“The world is aware of simply how very severe we’re, and our allies are, about prosecuting any violation,” she stated. “There shall be actual penalties for any corporations or international locations that do attempt to get across the export controls.”
Chinese language commerce knowledge additionally recommend that almost all corporations are following the restrictions. Though China has continued to purchase Russian power, Chinese language exports to the nation have fallen sharply for the reason that invasion.
However Mr. Spleeters stated Russia’s army had used inventive strategies to get round previous restrictions on expertise imports — comparable to shopping for international merchandise by means of entrance corporations, third international locations or civil distributors — and will flip to the identical strategies to bypass sanctions.
Mr. Spleeters’s analysis has revealed efforts by some actors to disguise the presence of Western expertise in Russian gear. Throughout his journey to Kyiv, Ukraine’s capital, Mr. Spleeters and his colleague unscrewed three casings holding superior Azart encrypted radios, which offer safe communication channels for Russian forces.
They discovered that the primary two contained microchips with components of their manufacturing marks rigorously obliterated, seemingly an effort to disguise their origin. However contained in the third radio was an an identical chip that had slipped by its Russian censors, exhibiting it had been made by an organization based mostly in the USA. (Mr. Spleeters stated his group wouldn’t publicize the names of the producers till he had despatched requests for info to every firm asking how their wares ended up within the palms of the Russian army.)
Mr. Spleeters stated it was not clear who had altered the markings or when the chips have been delivered to Russia, although he stated the try to masks their origin was intentional. In 2014, after the Russian invasion of Crimea, the USA imposed restrictions that have been largely unilateral on transport Russian high-technology objects that would assist its army skills.
“It was neatly erased, perhaps with a device to take out only one line of markings,” Mr. Spleeters stated. “Somebody knew precisely what they have been doing.”
Whether or not the just lately imposed sanctions would end in a basic discount of those sorts of provides to Moscow was unclear, he stated, on condition that Russia has such a big stockpile of Western expertise.
His crew additionally dissected the remnants of three totally different Russian surveillance drones, known as Orlan, Tachyon and one beforehand unknown mannequin that Ukrainian officers known as Kartograf. Contained in the Orlan, they discovered six separate components from corporations with headquarters in the USA, and one every from corporations based mostly in Switzerland and Japan. Within the different two drones, they pulled components from firms in the USA in addition to in China, Germany, the Netherlands, South Korea, Sweden and Taiwan.
As Mr. Spleeters and his colleague labored, he requested a member of the Ukrainian safety service about their findings of Western components powering Russian weapons.
“It’s simply enterprise,” the officer replied.
“It’s an enormous enterprise, and other people have been simply promoting chips and never caring or not in a position to know what they’d be used for finally,” Mr. Spleeters stated of the Western electronics corporations. “I don’t assume they’d be capable of know who’d use them and for what goal.”
Eric Schmitt contributed reporting.

Business
Video: How Staffing Shortages Have Plagued Newark Airport

What’s causing major flight delays and disruptions at Newark Liberty International Airport? Niraj Chokshi, a reporter at The New York Times covering transportation, explains how a staffing shortage has contributed to the chaos and what’s being done to address it.
Business
L.A. council members were told a vote could violate public meeting law. They voted anyway

When Los Angeles City Council members took up a plan to hike the wages of tourism workers this week, they received some carefully worded advice from city lawyers: Don’t vote on this yet.
Senior Assistant City Atty. Michael J. Dundas advised them on Wednesday — deep into their meeting — that his office had not yet conducted a final legal review of the flurry of last-minute changes they requested earlier in the day.
Dundas recommended that the council delay its vote for two days to comply with the Ralph M. Brown Act, the state’s open meeting law.
“We advise that the posted agenda for today’s meeting provides insufficient notice under the Brown Act for first consideration and adoption of an ordinance to increase the wages and health benefits for hotel and airport workers,” Dundas wrote.
The council pressed ahead anyway, voting 12-3 to increase the minimum wage of those workers to $30 per hour by 2028, despite objections from business groups, hotel owners and airport businesses.
Then, on Friday, the council conducted a do-over vote, taking up the rewritten wage measure at a special noon meeting — one called only the day before. The result was the same, with the measure passing again, 12-3.
Some in the hotel industry questioned why Council President Marqueece Harris-Dawson, who runs the meetings, insisted on moving forward Wednesday, even after the lawyers’ warning.
Jackie Filla, president and chief executive of the Hotel Assn. of Los Angeles, said the decision to proceed Wednesday gave a political boost to Unite Here Local 11, which represents hotel workers. The union had already scheduled an election for Thursday for its members to vote on whether to increase their dues.
By approving the $30 per hour minimum wage on Wednesday, the council gave the union a potent selling point for the proposed dues increase, Filla said.
“It looks like it was in Unite Here’s financial interest to have that timing,” she said.
Councilmember Monica Rodriguez, who opposed the wage increases, was more blunt.
“It was clear that Marqueece intended to be as helpful as possible” to Unite Here Local 11, “even if it meant violating the Brown Act,” she said.
Harris-Dawson spokesperson Rhonda Mitchell declined to say why her boss pushed for a wage vote on Wednesday after receiving the legal advice about the Brown Act. That law requires local governments to take additional public comment if a legislative proposal has changed substantially during a meeting.
Mitchell, in a text message, said Harris-Dawson scheduled the new wage vote for Friday because of a mistake by city lawyers.
“The item was re-agendized because of a clerical error on the City Attorney’s part — and this is the correction,” she said.
Mitchell did not provide details on the error. However, the wording on the two meeting agendas is indeed different.
Wednesday’s agenda called for the council to ask city lawyers to “prepare and present” amendments to the wage laws. Friday’s agenda called for the council to “present and adopt” the proposed changes.
Maria Hernandez, a spokesperson for Unite Here Local 11, said in an email that her union does not control the City Council’s schedule. The union’s vote on higher dues involved not just its L.A. members but also thousands of workers in Orange County and Arizona, Hernandez said.
“The timing of LA City Council votes is not up to us (sadly!) — in fact we were expecting a vote more than a year ago — nor would the precise timing be salient to our members,” she said.
Hernandez said Unite Here Local 11 members voted “overwhelmingly” on Thursday to increase their dues, allowing the union to double the size of its strike fund and pay for “an army of organizers” for the next round of labor talks. She did not disclose the size of the dues increase.
Dundas’ memo, written on behalf of City Atty. Hydee Feldstein Soto, was submitted late in Wednesday’s deliberations, after council members requested a number of changes to the minimum wage ordinance. At one point, they took a recess so their lawyers could work on the changes.
By the time the lawyers emerged with the new language, Dundas’ memo was pinned to the public bulletin board in the council chamber, where spectators quickly snapped screenshots.
Business
Epic Games says Apple blocked 'Fortnite' in U.S. app store
Epic Games on Friday said that its popular game “Fortnite” will be offline on Apple devices because the iPhone maker blocked its recent app update.
The dispute comes just weeks after Epic Games and other app developers cheered a judge’s ruling that limited the commissions that Apple makes through third party apps distributed through its app store.
Apple received a scathing rebuke from U.S. District Judge Yvonne Gonzalez Rogers, who sided with Epic Games, which alleged that the Cupertino, Calif., tech giant ran afoul of an order she issued in 2021 after finding the company engaged in anticompetitive behavior.
Under the ruling, Apple can’t collect commissions on purchases U.S. customers make through links inside iPhone apps that direct them to outside websites. Developers, which make money by selling digital goods and services via their apps and games, want to avoid giving Apple a cut of their revenue by sending customers to other websites.
“That [Apple] thought this court would tolerate such insubordination was a gross miscalculation,” the judge wrote in her ruling.
Many developers applauded the court’s ruling, which limits what they call the Apple tax, and said they would pass on the savings to customers.
Epic Games’ Chief Executive Tim Sweeney earlier this month said “Fornite” would return to the App Store in the U.S. and possibly worldwide if Apple extends “the court’s friction free, Apple tax-free framework” globally. But on Friday, the “Fortnite” X account said that Apple blocked its submission.
“Now, sadly, Fortnite on iOS will be offline worldwide until Apple unblocks it,” the account posted. Epic Games did not return requests for further comment.
Apple said on Friday that it asked that “Epic Sweden resubmit the app update without including the U.S. storefront of the App Store so as not to impact Fortnite in other geographies.”
“We did not take any action to remove the live version of Fortnite from alternative distribution marketplaces,” Apple said in a statement.
Rob Enderle, principal analyst with advisory services firm Enderle Group, said the recent ruling applies to the U.S. and Apple wants to retain the rest of its control worldwide. Apple makes significant money through apps.
“Apple is using their … strength to prevent ‘Fortnite’ from benefiting globally from their core win,” Enderle said.
Epic Games filed its lawsuit against Apple in 2020. “Fornite” generates revenue by letting people buy digital goods, such as “skins,” in the game, and Epic wanted to let users buy items outside the Apple system to avoid the company’s commission.
While the judge ruled that Apple did not have a monopoly in the mobile gaming market, the court ordered Apple to let app developers put links in its apps so customers could make outside purchases and bypass the company’s commission fee. Apple, however, defied the order, the court said.
Apple limited the ways that developers could communicate with its customers about out-of-app purchases and used wording that discouraged users from clicking on those links, the judge wrote. Apple would charge a commission fee for any goods or services purchased within seven days of a consumer clicking on a link that took them out of the app, the ruling said.
Apple is appealing the ruling and has said it strongly disagreed with the judge’s decision.
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