Taiwan's Acer ships computer hardware to Russia after saying it would suspend business -data

© Reuters. A view shows a store selling products of computer manufacturer Acer in Moscow, Russia, June 7, 2023. REUTERS/Stringer

By Filipp Lebedev and Gleb Stolyarov

(Reuters) -Taiwan-based computer manufacturer Acer supplied at least $70.4 million worth of computer hardware to Russia between April 8, 2022 and March 31, 2023, according to customs data seen by Reuters, after saying it would suspend its business there.

While not illegal, Acer's actions contrast with those of key Western rivals such as Dell and HP (NYSE:HPQ) which ceased shipments in February and April 2022, respectively, following Moscow's full-scale invasion of Ukraine, customs records drawn from a commercial trade data provider show.

The records show equipment produced by Acer was supplied to Russia both through Acer's wholly-owned subsidiary registered in Switzerland and a number of delivery services by order of that subsidiary.

As the shipments originated outside Taiwan, they did not violate Taipei's sanctions against Russia. Nor did they involve items restricted at the time of export by Switzerland's sanctions regime, which mirrors that of the European Union.

But in a statement on April 8 last year, the company said: "Due to recent developments, Acer has decided to suspend its business in Russia."

Asked about subsequent exports to Russia via Swiss subsidiary Acer Sales International SA, Acer in Taiwan said in a statement that "we strictly adhere to applicable international regulations and trade laws regarding exports to Russia".

It added that the Swiss subsidiary "had not shipped any laptops or desktops to Russia since April 8 last year", but that it had supplied a "limited number of displays and accessories to the Russian market for civilian daily use while ensuring compliance with international sanctions".

Acer did not say why it continued shipping its goods to Russia despite saying it would suspend business there.

A source familiar with details of the shipments, who declined to be named due to the sensitivity of the issue, said Acer's products, including PC monitors and laptops, continued to be shipped to Russia after April 2022.

Reuters was unable to establish where some Acer goods that can still be found on sale in Russia had originated from nor when they had arrived in the country.

Swiss sanctions, in line with the EU's, allowed the export of laptop computers and computing components to Russia until Dec. 16, 2022. There were no deliveries of the newly prohibited items by Acer to Russia from Switzerland after that date.

The company told Reuters it was possible that importers in Russia sourced Acer devices from third countries.

Acer's Russian unit, in response to emailed questions, said "nothing has changed" since the April 2022 statement.

Acer accounted for 18.5% of all PCs sold in Russia in the fourth quarter of 2021, according to consulting company IDC Russia, while HP and Dell made up a combined 20.8%.

The shipments underline how, despite international sanctions aimed at limiting Russians' access to technology and equipment, foreign-made goods remain available to consumers.

And Artem Zhavoronkov, a partner at St. Petersburg-based law firm Nordic Star, said Acer risked reputational damage.

G7 leaders at a recent meeting in Japan acted to tighten sanctions on Russia and cut off Moscow's attempts to evade them.

FEWER SHIPMENTS

Russian customs data shows at least 744 shipments of Acer's products entered Russia between April 8, 2022 and March 31, 2023, compared with 3,735 in the year earlier period for a total of $244.3 million.

In monetary terms, shipments fell 71.1%, according to the data, with laptops and PC monitors making up the bulk of shipments.

Taiwan announced it would join sanctions against Russia on Feb. 25, 2022, with a special export permit required for technological goods on a government-compiled list.

Taiwan's Economy Ministry told Reuters that high performance electronics, including monitors, displays and laptops are included on this list and applications for export "in principle will not be approved".

    The ministry said that as of end-March 2023 Acer had not applied for such permits, and there are no Taiwanese customs records of Acer exports to Russia. The ministry declined to comment further.

The main supplier of Acer equipment to Russia last year was Acer Sales International SA, a firm registered in the city of Bioggio, in the southern Italian-speaking canton of Switzerland.

An officer of the subsidiary did not respond to requests for comment sent via WhatsApp.

Switzerland's State Secretariat for Economic Affairs told Reuters that it does not comment on individual cases or specific companies.

Russia's Ministry of Industry and Trade did not respond to a request for comment.