Serbia exporting dual-use goods to Russia despite pledge not to help bypass sanctions

Serbia exporting dual-use goods to Russia despite pledge not to help bypass sanctions
RFE/RL found several Serbian companies sharply increased exports of dual-use products to Russia after Ukraine invasions. / bne IntelliNews
By bne IntelliNews November 9, 2023

Several Serbian companies have hiked their exports of dual-use goods products with both military and civilian applications to Russia following the invasion of Ukraine in 2022, according to an investigation by RFE/RL's Balkan Service

Serbia has refused to join Western sanctions on Russia, a long-standing ally, despite coming under pressure to align its foreign policy with the EU’s as a candidate country. However, President Aleksandar Vucic has promised that Serbia would not facilitate the bypassing of sanctions. 

The RFE/RL investigation, based on customs records from international trade databases, now reveals exports of goods targeted by sanctions due to their use in Russian armaments deployed in Ukraine.

It finds Serbian companies sent sanctioned dual-use goods worth at least $71.1mn to Russia since the full-scale invasion of Ukraine in February 2022. These shipments include electronics and other equipment classified as high priority by the US and the EU. 

One of the firms scrutinised in the inquiry was Kominvex, a company specialising in manufacturing and distributing bulk automotive parts and equipment. As reported by RFE/RL, Kominvex’ profits used to be modest, with the company reporting a profit of $1,600 in 2021. However, the company's fortunes took a dramatic upswing the following year when it started exporting electronics to Russia. This resulted in a phenomenal surge in profits to $1.5mn in 2022.

RFE/RL found that Kominvex shipped products worth $143.9mn to Russia from late March 2022 to the end of July 2023. $54.3mn of this total comprised items categorised as high-priority electronics and equipment, namely products discovered in Russian weaponry found on Ukrainian battlegrounds, leading to export controls on such items.

Another company, Soha Info exported $18mn of goods to Russia between October 2022 and July 2023, as per available records. Among these exports were electronics valued at $6.3mn, again falling into the “high-priority" category of dual-use goods. Soha Info was founded in June 2022, just months after the invasion, achieving turnover of $6.1mn within its initial six months of operation. 

RFE/RL said it did not receive responses for inquiries to the Serbian presidency, the government or the Domestic and Foreign Trade Ministry. 

EU officials have repeatedly appealed to Serbia to join international sanctions on Russia, or risk having its EU accession process stall. The latest EU enlargement package released on November 8 comments that the decision not to join sanctions and maintain high-level relations with Russia raises “questions about Serbia’s strategic direction”. 

It also notes that “Serbia has committed to take appropriate action in order to stop the possibility circumvent EU restrictive measures introduced in the context of Russia’s aggression against Ukraine via Serbian territory and/or by legal entities registered in Serbia, including through monitoring, identifying and inspecting suspicious trade flows of priority battlefield goods and economically critical goods”. 

However, the report adds: "Serbia’s law on dual-use goods remains to be aligned with Regulation (EU) 2021/821 of May 2021.”

Other countries with friendly relations with Russia have also been criticised for exports of dual-use products, thereby helping to circumvent sanctions. 

Kyrgyzstan’s foreign trade data indicate the country is sucking in piles of imports that get redirected to Russia as part of Moscow’s trade sanctions circumvention efforts.

Several companies and individuals from the country have lately come under US sanctions fire

One example is the sudden hike in Chinese exports of ball bearings to Kyrgyzstan, which shot up by around 2,550% from 2021 levels. If re-exported to Russia, the ball bearings can end up in Russian tanks on the Ukraine battlefield, as pointed out by a senior fellow at the Atlantic Council think-tank. 

Meanwhile, Armenia’s exports to Russia surged in 2022, at a staggering growth rate of 187% compared to the previous year. Over half of these exports were re-exports originating from third countries, adding fuel to speculation that Armenia is playing a key role in the rerouting of Western imports to Russia to avoid sanctions.


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