Russian imports from Central Asia up by a third in 1H23 as goods circumvent sanctions

By bne IntelliNews October 13, 2023

Russian imports from Central Asia move up by a third in the first half of this year as goods circumnavigated sanctions, reports The Bell, which studied mirror trade statistics of Russia’s trade partners.

“We studied statistics from Kazakhstan, Georgia, Armenia, Uzbekistan, Azerbaijan, Kyrgyzstan, Tajikistan and Turkey. It confirms that Russia has found many loopholes to circumvent sanctions – imports increased by more than a third, or $5.2bn,” the publication reported on October 13.

The growth of imports from these countries occurred in parallel with the growth of European exports to them. For the first half of 2023, compared to the same period in 2022, they increased by $16.8bn, or 22%.

Direct European exports to Russia fell to their lowest levels in 18 years. At the end of 2022, they dropped to $59bn – less than 2% of total EU exports. In the pre-sanctions era prior to 2014, the EU was Russia’s biggest trade partner with a turnover on the order of €350bn a year.

The growth of the eight Central Asian and Caucasus countries' imports from the EU turned out to be sharply uneven across product groups. These are mainly sanctioned groups including telecommunications equipment, microelectronics, electrical engineering, and data processing tools (computers, servers, peripherals).

Among European countries, some have specifically reoriented their trade flows, noted Robin Brooks, chief economist at the Institute of International Finance. Latvia, Lithuania, Estonia, and Poland have reduced exports to Russia, while at the same time increasing exports to the countries of Central Asia.

Goods are reaching Russia through these countries, Brooks argues.

“It is obvious that businesses are looking for ways to deliver their products to Russian consumers. If direct export becomes difficult, Russia chooses indirect routes,” Brooks wrote on social media.

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