The last time Western sanctions hit Russia following its annexation of Crimea, President Vladimir Putin turned to Huawei to rebuild and upgrade the region’s communications infrastructure. Now, the controversial Chinese tech company is poised to help the Putin regime on a wider scale, despite Washington’s threat to impose more sanctions on it.

In Crimea, Russia “has phased out Western telecommunications equipment in a highly militarized region and replaced it with Huawei and ZTE,” said Hosuk Lee-Makiyama, a telecommunications expert at the European Centre for International Political Economy. If Nokia and Ericsson do pull out of Russia altogether, Moscow will “need Chinese companies, especially Huawei, more than ever,” he said.

Although a initial plunge Huawei has been an early winner of the Ukraine war in terms of handset shipments. Its mobile phone sales in Russia jumped 300% in the first two weeks of March, while other Chinese brands Oppo and Vivo also recorded triple-digit sales growth, according to analysts at MTS, Russia’s largest mobile operator.

Its four Russian research centers are hiring dozens of engineers, including machine-learning scientists in Novosibirsk, speech-recognition researchers in St. Petersburg and big-data analysts in Nizhny Novgorod. Huawei has also added new sales and business development opportunities in Moscow since the invasion of Ukraine began, according to its website.

But experts say Chinese tech companies such as Huawei and rival Xiaomi run the risk of violating sanctions if they continue to ship mobile phones and telecommunications equipment to Russia. They need Washington’s approval because the electronics often contain high-end semiconductors or are made with U.S. tools, making them subject to new sanctions from Moscow.

Huawei could be subject to more sanctions from Washington — such as Trump’s order banning ZTE from using any technology linked to the United States — which would deal another major blow to the Chinese company’s business.

“I bet it’s impossible [Huawei and other Chinese phonemakers] legally exported to Russia,” said Kevin Wolf, a former Commerce Department official and sanctions expert.

“Theoretically it is possible [Huawei] Have been able to figure out how to make a cell phone or base station without American tools, software, etc.But it’s hard to believe they can find all [semiconductors] Not made with American tools. “

Huawei has struggled to wean itself off the U.S. semiconductor supply chain since the Trump administration imposed U.S. sanctions Cut off access to the chipThe company’s rotating chairman, Guo Ping, told reporters on Monday that it relies on chip inventories. He added that Huawei is working to redesign products to bypass the U.S. supply chain by getting equivalent performance from less advanced chips.

The company said on Monday that sanctions would hurt Huawei’s chip-intensive smartphone business the most, causing its consumer product revenue to shrink by 50% last year. Huawei’s total revenue fell 29% from a year earlier to 636.8 billion yuan ($100 billion) last year, helped by largely flat sales across its telecom and enterprise business lines.

Huawei’s successor Meng Wanzhou recently back to China After being detained in Canada for nearly three years for allegedly violating sanctions against Iran, the Huawei team said it had been “under a lot of pressure over the past few years.”

“It brings us closer together and brings clarity to our strategy,” she said.

Russia needs Huawei. Apple and Samsung’s retreat has put half of the smartphone market in the spotlight, while Ericsson and Nokia’s suspension of operations in Russia has left a gap in the supply of telecom equipment for broadband and mobile network infrastructure that needs to be maintained and eventually upgraded .

More than two decades ago, Russia was Huawei’s first foray into foreign markets, and the sanctions deepened the relationship, and Huawei found a buyer willing to buy network infrastructure. Like Crimea, Russia turned to Huawei when it needed a reliable company to provide the hardware backbone of the new sanctions-resistant state payment system Mir.

Analysts say Huawei has won most of the contracts to roll out 4G and 5G networks in Russia. Huawei and Chinese peer ZTE control about 40% to 60% of the Russian wireless network equipment market, with Nokia and Ericsson making up most of the rest, according to market research firm Dell’Oro.

An opportunity for Huawei could also lie in sharing with Russia its sanctions defense programs, including the Harmony operating system it developed for its phones after losing access to Google’s mobile services.

Vladimir Puzanov, CEO of Russian phone maker BQ, told Russian media last week that the company was considering installing HarmonyOS on new devices. Huawei said it has no current plans to “launch or promote HarmonyOS outside of China.”

“Huawei has a large share of the Russian market . . . and now the sanctions have weighed on them like a 200-pound weight, what’s so scary about having 20 pounds?” Beijing-based technology consulting firm Strategy Analytics Analyst Yang Guang said. “However, as a business organisation, they may be on the sidelines for now.”

Washington is keeping a close eye on Huawei. Commerce Department export official Matthew Borman threatened Chinese companies on Tuesday to bypass Russian sanctions with a “total ban” [of] Not just a deal, but any deal” or even a “denial order” . . . like the one we imposed on ZTE”.

Borman said Washington has approved a large number of export license Foreign suppliers can continue to sell to Huawei, but these could be withdrawn.

Huawei’s Guo said the company was “carefully evaluating” the new sanctions. Huawei declined to answer further questions about its plans in Russia.

Nian Liu contributed reporting from Anhui