“The Eurasian Carousel”. The countries of Transcaucasia and Central Asia redirected half of the new imports from the EU and the USA to Russia

It is not without reason that the United States and the European Union have recently focused on the effective implementation of sanctions imposed on Russia. Parallel imports have enabled Russia to supply many prohibited dual-use goods and high-tech technological products. A significant part of this flow passes through the countries of Central Asia and the Caucasus.

The European Bank for Reconstruction and Development (EBRD) even came up with a name for this phenomenon – the “Eurasian carousel”.

Total EU and US exports of goods to Armenia, Georgia, Kazakhstan, Kyrgyzstan and Uzbekistan increased in 2022 by $9.7 billioni.e. by 66% to USD 24.3 billion, and exports from these five countries to Russia increased by $4.8 billionor nearly 50% from 2021 to $15 billion, The Wall Street Journal calculated based on UN trade data.

For banned products, the relative increase in trade flows is much more impressive. Thus, last year, shipments of integrated circuits from the US and the EU to Armenia exceeded USD 8.5 million, which is 16 times more than in 2021 (USD 530,000). And their exports from Armenia to Russia increased 6,500 times, from less than $2,000 to $13 million.

A similar picture is observed with shipments of lasers and measuring instruments via Kyrgyzstan, notes the WSJ.

Kazakhstan increased imports the most – by USD 4.7 billion; however, its exports to Russia decreased significantly – by USD 1.8 billion, but Kyrgyzstan and Uzbekistan apparently sent to Russia almost everything they additionally bought in the West: in the first case, the inflow was USD 0.9 billion, and the outflow – USD 0.6 billion, in the second USD 1.3 billion and USD 0.9 billion, respectively.

And Armenia’s additional exports to Russia turned out to be even greater than the additional imports from the EU and the US – $1.6 billion versus $1.2 billion.

Electronics are needed everywhere – from aircraft to cruise missiles, military and fire control systems, communication systems in armored cars and tanks, says military expert Pavel Luzin, a visiting fellow at Tufts University.

Deliveries via the countries of the Caucasus and Central Asia are not among the largest flows of parallel imports. For example, through Hong Kong and mainland China, from February 24 to the end of 2022, US chips alone were delivered to Russia for $ 570 million, which is 11 times more than during the same period in 2021.

And over the course of eight months last year, banned aircraft parts worth $14.4 million were sent to Russia from the United States, including Boeing worth $8.9 million, The New York Times writes, citing Russian customs records. Most deliveries to US-sanctioned Russian airlines went through the United Arab Emirates, Turkey, China and the Maldives.

Even small amounts shipped to many countries “make a significant contribution” to Moscow’s ability to continue to access Western technology, and this “propels rather than stifles the war effort,” said Sarah Stewart, director general of Washington’s Silverado Center. An accelerator that analyzes Russian trade data.

Therefore, the EU and the US are now actively engaged in stepping up enforcement. David O’Sullivan, the newly appointed EU special envoy for sanctions, told reporters in April that his first task was to work with countries, including in Central Asia, that Russia uses to circumvent the sanctions. He said tougher measures, such as an export ban or sanctions, would only be considered if these countries failed to make efforts to close legal loopholes. Recently, O’Sullivan, during a visit to Uzbekistan, handed over to the country’s authorities a list of goods that have a military purpose and are used by the Russian army in the war with Ukraine.

As part of the work on the 11th package of sanctions, the EU is preparing a mechanism to stop third countries from providing aid to Russia and cutting off the supply chains of key products. To this end, it is planned to create two lists – countries with which re-export routes should be closed, and goods whose sale to these countries may be prohibited.

The EU can ban the export of certain goods to certain countries if it has clear evidence that they are entering Russia, European Commission President Ursula von der Leyen said on Monday. The G7 countries that will meet in May are also stepping up efforts to combat sanctions circumvention, she said:


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