EU Weighs Dropping Russia-Related Sanctions on Chinese Firm in ASML Supply Chain Deal

Proposed Sanctions Swap

The European Union is preparing to lift trade restrictions on an unnamed Chinese company accused of helping Russia's war against Ukraine, as part of a deal with Beijing aimed at protecting a key supplier to ASML Holding NV, Bloomberg reported on October 14.

Under the proposed arrangement, China would remove restrictions on Sindlhauser Materials GmbH, a small German company that supplies components within ASML's semiconductor production chain. In return, the EU would lift restrictions imposed on the Chinese company under its 21st sanctions package against Russia.

Retaliatory Measures and Semiconductor Stakes

That package targeted several Chinese firms accused of supplying Moscow with key components that could be used in weapons production. China sanctioned Sindlhauser and 13 other European companies in July in retaliation for the EU measures, Bloomberg reported.

Sindlhauser specializes in high-precision manufacturing and advanced coatings for the semiconductor industry and other sectors. ASML, headquartered in the Netherlands, is one of the world's most important manufacturers of advanced chipmaking equipment.

A Possible Model for Future Disputes

Brussels and Beijing have also agreed to exchange more information and provide warning of future export restrictions, according to people familiar with the talks. Bloomberg noted that removing Sindlhauser and the Chinese company from their respective restrictions could establish a model for resolving similar sanctions disputes in the future.

The talks come as Europe tries to protect strategic semiconductor supply chains while maintaining pressure on companies accused of supporting Russia's military-industrial base.

Sources: UNITED24 Media · Bloomberg · Techmeme