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Report says Taiwan machine tools entering Russia despite export ban

Machine tool manufacturers association says data shows no abnormalities

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A piece of metal is moved into a precision cutting machine. (Canva image)

A piece of metal is moved into a precision cutting machine. (Canva image)

TAIPEI (Taiwan News) —Taiwanese firms have become a key source of precision machine tools for the Russian arms industry as it continues its war in Ukraine, according to a joint investigation by Taiwanese and Russian media outlets.

According to the joint investigation, published by Taiwanese outlet The Reporter on Wednesday (Jan. 24) and later in English by Russian outlet The Insider, exports to Russian companies have continued despite sanctions imposed by Taiwan’s government. Taiwan machine tool industry representatives said export data shows no abnormalities given past trends.

The Reporter-Insider investigation uses figures obtained from NBD Trade Data that show a spike in exports of machine tools from Taiwan to Russia after the former invaded Ukraine in February 2022. After the start of the war, Taiwan’s economic ministry initially only imposed export controls on semiconductors and other advanced technologies to Russia.

In January 2023, Taiwan authorities imposed export bans on the machine tools to Russia, in line with most Western nations. However, the report said this did not prevent the goods from being obtained by Russian companies.

According to data presented in the report, after the updated export ban was imposed, Turkey then became the largest market for Taiwan’s export of precision tools. The investigation found that these goods were being imported by companies working with Taiwanese counterparts, who then on-sold them to Russian firms.

The report appears to show further instances of Taiwanese machine tools making their way into the possession of Russian organizations, including a Russian scientific institute that is under U.S. sanctions.

On Friday, the Taiwan Association of Machinery Industry (TAMI) said the increased exports of Taiwanese machine tools to Turkey in January 2023 were reasonable given past figures, per UDN Money. TAMI said that machine tool exports to Turkey fluctuated greatly in the five years between 2019 and 2022, and the increase in exports in 2023 was “not abnormal.”

Taiwan’s machine tool manufacturers are mostly small and medium-sized businesses, TAMI said. It said about 80% of them are reliant on the export market, and although they try their best, they cannot be completely sure of the final use of the products.

TAMI said it will also encourage its members to comply with government export restrictions, and increase discussion about how to ensure compliance.

One day prior, the Taiwan Machine Tool & Accessory Builders’ Association (TMBA) released a statement in response to the investigation but did not directly respond to the claims within it. On Thursday, TMBA said that its members comply with export control measures imposed by the Taiwan government, and said it will continue to ensure its members adhere to them going forward.

TMBA also said its members have held discussions with Taiwan’s economic ministry about how to ensure sanctions are observed.