Central Asia ‘washing machine’ sales that help Russia repair tanks may spark EU crackdown

Central Asia ‘washing machine’ sales that help Russia repair tanks may spark EU crackdown
Beware the Russian tank engineer who volunteers to do the laundry. / Bin im Garten, cc-by-sa 3.0
By bne IntelIiNews March 27, 2023

The European Union is reportedly considering slapping trade restrictions on Kazakhstan, Uzbekistan and Kyrgyzstan for assisting Russia in acquiring goods such as washing machines and used cars that can be stripped for spare parts that are used in repairing battle-damaged tanks.

The potential move is discussed in a confidential document obtained by The Telegraph, in which European capitals weigh up plans to punish the Central Asian trio as well as other countries if they are found to be helping Moscow evade Ukraine war sanctions placed on Russia's defence industry by reselling “potentially dual-use” goods to Russian buyers.

On March 27, Kazakhstan said that it would require exporters to file additional documents when sending goods to Russia. Astana has previously pledged to uphold war sanctions against Moscow. It said the new rules, effective from April 1 and applying to exports within the Russia-led Eurasian Economic Union (EEU) trade bloc, would reduce "underground" trade. "[The procedure] rules out the filing of documents by figureheads, fake senders or recipients," it said in a statement.

With sanctions hindering Russia’s efforts to obtain semiconductors on global markets, the Russians have stepped up imports of household appliances and automobiles that contain parts that can be used for repairing tanks, as well as armoured personnel carriers and combat drones. In particular, Moscow can extract chips from cars, washing machines and cameras. 

"We should give a strong signal to persons and entities in third states [that enable such trade channels for Russia]. The provision of material support to Russia’s military and defence industrial base will have severe consequences regarding their access to the EU market," the obtained document is reported as quoting a European official as saying.

European officials were alerted to worrying flows of dual-use items into Russia by significant expansions in the consumer goods trade between the Russians and various post-Soviet countries.

After the Polish-Belarusian border was closed to cargo transportation, most EU exports bound for CIS countries started going through Lithuania. Tracking the path taken by such goods after re-export to Central Asia is challenging, European officials say.

The authors of the confidential document propose to impose EU trade restrictions on individuals, companies or countries involved in the re-export of goods to Russia subject to restrictions introduced against the Kremlin.

Bloomberg in early March cited a senior European diplomat as saying that Russia was circumventing Western sanctions and obtaining important defence industry electronics such as chips and integrated circuits via third countries including Turkey, Kazakhstan and the UAE.

"Kazakhstan provides a key example,” the news service wrote. “In 2022 the Central Asian nation exported $3.7 million worth of advanced semiconductors to Russia, up from a mere $12,000 worth the year before the war started...The data show Turkey, Serbia, the UAE and a half-dozen other economies in Eastern Europe and Central Asia helped make up the shortfall."

On March 9, Turkey appeared to respond to Western pressure to crack down on flows of sanctioned goods to Russia via Turkish re-exporters when Turkish customs officials abruptly stopped permitting the transit of such items to Russian destinations. How much leakage there could be in that ban is yet to be determined by analysts but Reuters on March 27 referred to Kazakh businessmen as saying Turkey’s move against "parallel imports" prompted a fresh wave of requests from Russians seeking goods that they cannot purchase directly.