U.S. sanctioned 2 Montreal companies for supporting Russian 'war effort'

When the United States and other allies of Ukraine marked the one-year anniversary of Russia's invasion by announcing a new wave of sanctions against Vladimir Putin's regime, two Canadian companies were among 86 new entities targeted by the U.S. Department of Commerce for "a variety of reasons related to their activities in support of Russia's defense-industrial sector and war effort."

The Canada Border Services Agency has now revealed that these two companies were identified as part of a "global effort" that now includes U.S. officials being virtually embedded in Canada's inspection system.

CPUNTO Inc. and Electronic Network Inc. were listed for "acting contrary to the national security or foreign policy interests of the United States." They're now subject to U.S. export restrictions, effectively cutting off their access to certain goods unless the companies obtain a specific licence from U.S. authorities.

The Commerce Department listing didn't specify what these companies shipped or attempted to ship that caught American attention, making it unclear what kind of business they were engaged in to trigger this action.

Electronics wholesalers and distributors are under increasing global scrutiny. Certain components now in short supply, such as semiconductors, may not originally have been intended for defence industries but could now be re-purposed for military use.

U.S. officials have become increasingly serious about monitoring trade, including not only direct shipments in and out of the U.S. but goods that are "trans-shipped" — passing through one or more third-party countries on the way to their eventual destination.

While most of the entities added by the U.S. on Feb. 24 are from Russia, five are from China, and three were based in the European Union, as well as the two Canadian firms. The U.S. said "several" of the newly listed entities were subsidiaries of firms based in China and Russia.

The Commerce Department release said these listings were not an "action against the countries in which the entities are located or registered, or the governments of those countries." But it raises the question of why, if Montreal companies are engaged in trade that raises security concerns, the Canadian government didn't step in first.

CBC News asked the Canada Border Services Agency how it was made aware of this listing and why Canada hadn't taken action of its own to shut down this trade.

A week after the inquiry was first made, spokesperson Maria Ladouceur explained that the CBSA's Counter Proliferation Operations Section now has officers from the U.S. Bureau of Industry and Security (BIS) virtually embedded alongside its front-line officers responsible for inspecting incoming and outgoing shipments.

She said Canadian officials work with partners on "a daily basis to identify efforts to ship restricted goods and technologies to Russia via third countries."

In the year since the start of the war in Ukraine, CBSA officers have reviewed more than 500 shipments with a declared end destination of Russia, she said. Of those, several dozen have been referred for in-depth examinations, resulting in:

Ladouceur did not specify if these two firms were involved in any of these enforcement actions. Canadian officers, she said, contributed to the "global effort" that led to the two Montreal-area electronics distributors being added to the U.S. sanctions list. 

No additional information was offered as to what restricted shipments were identified or what information was shared in this joint process.