Russia found a way to bypass sanctions

Written by Henrik Rothen

Oct.10 - 2023 9:41 AM CET

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Photo: Shutterstock.com
Photo: Shutterstock.com
Russia found a way to bypass sanctions.

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Despite the European Union's efforts to impose economic sanctions on Russia following its aggression against Ukraine, new data suggests that the sanctions are not as effective as intended.

According to Allianz Research, cited by wiadomoscihandlowe.pl, essential goods continue to reach Russia, albeit through alternative routes and intermediaries.

While EU sanctions were designed to target nearly all sectors of Russia's economy, the reality paints a different picture. Allianz Research reveals that in the first half of 2023, exports to Russia dropped by 52 percent compared to the same period in 2019.

However, the report raises concerns about a significant increase in exports to countries that are part of the Eurasian Economic Union, which includes Russia.

The data highlights that EU exports to Turkey have risen by an average of 58.1 percent.

Even more striking are the increases in exports to Central Asian countries: Kazakhstan saw a 100 percent rise, Kyrgyzstan an 800 percent surge, Tajikistan a 151 percent increase, Turkmenistan a 78.5 percent growth, and Uzbekistan a 66.6 percent uptick.

Poland, too, has shifted its export focus. Since the Ukraine conflict began, its exports to Russia have decreased by 44 percent. However, Poland has increased its exports to Turkey by 137 percent and to Central Asia by a staggering 251 percent.

One sector that illustrates the ineffectiveness of the sanctions is the timber industry. Despite sanctions on Belarus and Russia, wood from these countries is still flooding into Europe, particularly Poland. European data shows a 9926.8 percent increase in wood imports from Kazakhstan in 2022, amounting to approximately $44 million, as estimated by the European Commission.

The surge in trade between these intermediary countries and Russia—53.8 percent according to the portal—indicates that goods are still reaching Russia, just via different pathways.

In conclusion, while the EU sanctions have impacted direct trade with Russia, they have not stopped the flow of goods. Instead, they have led to the emergence of new trade routes and intermediaries, raising questions about the effectiveness of the sanctions in isolating Russia economically.