Russia still has €1 billion worth of sanctioned goods

Goods worth more than $1 billion from sanctioned EU countries have disappeared during transit to Russia's economic partners and are likely to have entered the Russian economy.

This was reported by the Financial Times.

Open data analyzed by the publication showed that only about half of the controlled "dual-use" goods worth $2 billion sent from the EU actually reached their declared destinations in Kazakhstan, Kyrgyzstan, and Armenia.

These goods, which, according to the EU, could be used by military or intelligence services and are subject to export controls, could have reached Russia directly from the EU under the pretext that they were only in transit.

A disproportionately large share of the "ghost" exports that never reached their official destination came from the Baltic states bordering Russia and Belarus.

These goods were shipped in 2022 after Russia's full-scale invasion of Ukraine when the EU's sensitive trade with Kazakhstan, Kyrgyzstan, and Armenia - three former Soviet republics now in an economic union with Russia - increased to unprecedented levels.

The discrepancy in the records suggests that Russia circumvented sanctions by using intermediaries, agents, or suppliers who indicated false destinations in EU customs declarations. This method helped Moscow maintain access to critical European products, including aircraft components, optical equipment, and gas turbines.

For some specific categories of goods, such as gas turbines, soldering irons, and broadcasting equipment, import data show that almost none of the goods shipped from the EU reached their destination.

This underscores the difficulty of efforts to cut off Russia's access to sensitive goods, even if these goods are subject to agreed restrictions by the G7 countries.

Author - Olena Madiak, 11/05/2023