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Topic:

Sanctions Evasion

Country:

USA & Europe

Issue:

Article ID:

36

Title:

West Seeks to Increase the Costs of Russia Sanctions Evasion

Author:

Alexander Kolyandyr

Date:

September 20, 2024

Source:

Carnegie Foundation

Reference:

Summary:

Quotes:

With the aid of sanctions, the European Union has reduced exports to Russia to a record low and completely halted the supply of some key industrial components. Yet that is only part of the picture. Some countries—like Turkey, the United Arab Emirates, and Armenia—function as intermediaries through which Russia still receives European goods and equipment. Sanctions evasion via third countries is not a new problem. Even though the full-scale war in Ukraine has been raging for two and a half years, Ukrainians still find recently made Western components in the Russian cruise missiles falling on their cities. As a result, Western policymakers have begun to change their focus. Instead of trying to stop all exports to Russia, which is impossible, they are seeking to make sanctions evasion more costly... the data for third countries (which have never imposed sanctions on Russia) shows a sharp rise in imports of goods that Russia once obtained directly from the EU. This is the case even without taking into account China, whose imports from the EU are so huge that any changes linked with Russia are not visible in the data. For example, the export of power generation equipment from the EU to Russia has dropped steadily since the full-scale invasion of Ukraine. In June, it was valued at just 30,000 euros ($33,200), down from 35 million euros ($38,575,000) three years earlier. In the same period, however, Turkey increased imports of EU power generation equipment by 42 percent to 48.6 million euros ($53,785,000), and the United Arab Emirates ramped it up more than fivefold to 54.8 million euros ($60,646,000). It’s difficult to explain such growth as the result of inflation or increased internal demand... A more realistic goal for Washington and Brussels is to continue to increase the costs associated with reexport to Russia. Tightening control over intermediaries and exporters significantly increases the pressure from sanctions, hampering the work of many sectors, including Russia’s military-industrial complex.

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