Kyrgyzstan, Armenia, Turkey: Russia continues to buy sanction products through these countries

Kyrgyzstan, Armenia, Turkey: Russia continues to buy sanction products through these countries

Due to the sanctions imposed on Russia, exports from the Netherlands to this country have come to a standstill. However, the trade of sanctioned products with Russia’s neighboring countries is developing. According to NOS research, these countries send such goods to Russia in large numbers.

With sanctions, European member states want to make it harder for Russia to finance the war in Ukraine. For example, chips and factory parts for refineries are no longer allowed in Russia, but neither are luxury goods such as expensive cars, yachts, jewelry or clothing.

Before the sanctions, exports of now sanctioned products looked like this:

For example, it is known from the old sanctions against Iran and Syria that states are looking for ways to circumvent trade bans. For example, traders and exporters use alternative countries for this purpose.

Customs therefore does not take into account only direct trade with Russia. The alarm also sounds at customs authorities when a consignment containing expensive watches or ship parts is sent to a suspicious neighboring country, Russia. A spokesperson does not want to say which countries customs are considering as potential bypass countries. “Otherwise we make malicious people smarter and they just choose other countries.”

Kyrgyzstan and Armenia

Based on foreign news about the (possible) evasion of sanctions, NOS has selected a number of countries likely to be used as alternative countries. This initially affects Kyrgyzstan, Armenia and Kazakhstan, which, along with Russia and Belarus, were part of the Eurasian Economic Union. There are also important trading partners and neighboring countries such as Uzbekistan, Tajikistan and Turkey.

Especially with Armenia, Kyrgyzstan, Uzbekistan, Kazakhstan and Turkey, trade has increased significantly. In Tajikistan the situation was less. There are also countries that have not reported to the United Nations up-to-date data on imports and exports. In some cases, reporting was stopped shortly after the Russian invasion of Ukraine.

Trade with bypass countries has increased since the sanctions:

There are two explanations for why the export of sanction products to Russia has not completely dried up. Some products were already off the sanctions list right after the Russian invasion at the end of February. For example, gallium, essential for very good thermometers and solar cells, has been on the list since mid-March. A certain type of geyser has only been around since July.

In addition, while some product groups include items that are within the scope of sanctions, there are still products that are allowed to go to Russia. For example, coats. “Cheap coats can be exported,” says a customs spokesperson. Luxury goods exceeding 300 euros each cannot be sent to Russia. Therefore, the direct export of jackets has not yet decreased to zero.

reserve countries

Dutch exporters not only ship more sanctioned products to other countries; Russian trading partners have also been exporting much more products to Russia since the beginning of the war.

When we look at specific products, we see strong indications that some products actually seem like they could be applied easily.

“I hear that a lot in the market,” says Yvo Amar, a lawyer specializing in criminal law. Even if the entrepreneur suspects that the goods do indeed go to Russia and is not allowed to go there, the entrepreneurs knock on his door and ask if export to Kazakhstan or Turkey is allowed. I heard that Turkey is number one.

Armenia also stands out in the data. For example, since the sanctions the country appears to be a hub for air pumps and compressors. “They can also be used militarily,” says Amar.

Of course, it is theoretically possible that the Armenian industry suddenly needs these Dutch compressors and at the same time, Armenians produce more of these compressors for the Russian market. But the transition – and thus avoidance of sanctions – is clearer.

Attorney Amar says such indirect trade with Russia is also prohibited. “When customers ask me, I tell them it’s punishable. I don’t know what they’ll do next.”

But Amar can very well predict that some of the entrepreneurs will gamble and still send their belongings to Russia with a break. He might say, “90 percent of exporters will say they won’t do it, but 10 percent will try anyway, or I’ll go bankrupt.”

chance to catch

Also, the important thing is that the chances of getting caught don’t seem too high. As of October 2, customs stopped 258 shipments due to possible enforcement violations. Only four of these cases concerned a shipment to one of the alternative countries.

These signals eventually reach the prosecutor’s office. “We are getting signals from Customs, but also from superiors and Meld Misdaad Anoniem,” says a spokesperson. “We’re getting all these signals.”

The Public Prosecutor’s Office is currently conducting 50 investigations. “Some are affecting emergency countries,” the spokesperson says. One such case concerns Dmitri K., 55, who allegedly spent last summer delivering computer chips from a village in Gelderland via the Maldives and Kazakhstan to Russia.

But data shows that most kidnappings are not on the detection radar, according to Amar. “And it’s frustrating for Dutch entrepreneurs, too. I have clients who chose not to violate sanctions themselves but saw their competitors do so. You don’t have to worry.”

In a response, Foreign Minister Hoekstra said he acknowledged that more had to be done to combat tax evasion. “This is a game of cat and mouse. We need to reach out to these countries and talk to Europe about how we can fill these gaps.”

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Source: NOS