US could hit Russia with export rule that killed Huawei, banning US tech

The Kremlin. Credit: Ivan Lapyrin/Unsplash

The U.S. government has been contemplating a range of economic sanctions on Russia as the country masses troops around Ukraine's borders. On Monday, the crisis escalated as Russian President Vladimir Putin recognized the independence of two breakaway regions in Ukraine and ordered troops into the areas as "peacekeeping" forces.

One of those economic sanctions could be a Russia-focused Foreign Direct Product Rule (FDPR), according to U.S. think tank The Atlantic Council. Depending on its scope, the rule could cripple Russia's ability to source or use technology originating in the U.S.

If the rule sounds familiar, it's because the U.S. Commerce Department levied it against China-based smartphone manufacturer Huawei in 2019. As a result of the rule, Huawei was cut off from using U.S. chips or the Android operating system.

Since the ban was put into effect, Huawei's market share has plunged.

The effects of such a ban on an entire country will depend on its scope and breadth. However, The Washington Post points out that there isn't a chip or semiconductor on the planet made without U.S. tools or designed without U.S. software. So, there's no limit on how broad the U.S. ban could be.

According to The Economist correspondent Hal Hodson, it's possible to "say a few things about what applying the FDPR to Russia as a whole is likely to do."

Immediately after the ban, iPhone and Android devices could become less functional as App Store support and underlying protocols get cut off. Apple and Google would be forced to stop sending updates to their devices in Russia.

Even apps developed in Russia will be cut off from sending updates to U.S. app marketplaces. Phone networks and data centers could also be banned from using American software or hardware.

In other words, it would cripple Russia's ability to use any technology connected to the U.S. in any conceivable way.

The goal of an FDPR rule will likely be U.S. national security interests. The Atlantic Council says that the focus would be "hindering Russia's ability to procure crucial chips, integrated circuits, and microprocessors, as well as other advanced technologies." Those technologies are critical to Russia sectors like defense, civil aviation, and artificial intelligence.

"So far, the threat of the FDPR or other regulatory action has not induced the Kremlin to stand down, but Russia may soon join Huawei in realizing the potency of these measures," Annie Froehlich of The Atlantic Council wrote.

The U.S. is also preparing for such a ban. Earlier in February, the Commerce Department reorganized and reclassified rules that describe what foreign-produced items are and are not subject to export controls.

Leaders in the U.S. and its allies have already likened Russia's "peacekeeping" operations in eastern Ukraine to an invasion. The U.S. previously promised "swift and severe" consequences if an invasion occurs.

U.S. President Joe Biden is set to provide an update on the Russia-Ukraine crisis at 2 p.m. Eastern Time on Tuesday. The U.S. is also expected to announce a new set of sanctions, which could include the FDPR.