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Topic:
Sanctions Evasion
Country:
Armenia
Issue:
Article ID:
85
Title:
How Armenia helps Russia bypass Western sanctions
Author:
Seymur Mammadov
Date:
September 19, 2024
Source:
IntelliNews
Reference:
Summary:
Quotes:
Changes in the structure of goods flows and trade destinations between 2021 and 2023 are largely linked to circumventing Western sanctions against Russia. In 2021, Armenia’s foreign trade turnover with Russia increased by 24.2% compared to 2020, reaching $2.6bn. In 2022, it skyrocketed by 93.4%, amounting to $5bn, and in 2023, the growth continued at 45.7%, with turnover reaching $7.3bn. According to Alexey Overchuk, the First Deputy Chairman of the Russian Government, at an intergovernmental commission meeting on economic cooperation with Armenia, trade turnover between the two countries could reach $14-16bn in 2024. Should this forecast materialise, Armenia’s foreign trade volume with Russia would increase eightfold compared to 2020. According to Armenia’s National Statistical Committee, exports to Russia in 2022 tripled compared to the previous year, reaching $2.4bn. In 2023, this figure rose by 43.1%, hitting a historical high of $3.4bn. Between 2010 and 2020, the average annual growth rate of Armenian exports to Russia was 18.6%, while from 2020 to 2023, this rate sharply increased to 64%. Russia’s share in Armenia’s total exports, which stood at 27% in 2021, increased to 40-44% in 2022-2023. This growth can be attributed to Armenia’s strategy of circumventing sanctions – the country imports goods from the European Union, the Gulf and Asia, followed by re-exporting them to Russia. In 2023, 14.7% ($499mn) of Armenia’s exports to Russia consisted of telecommunications devices, 11.1% ($378mn) were passenger cars, 7.39% ($250mn) were monitors and projectors, 2.54% ($86mn) were calculators and their parts, and 1% ($31mn) were vacuum cleaners. In total, 91% of Armenia’s electromechanical equipment exports are directed to Russia. Additionally, exports of nuclear reactors and mechanical devices to Russia increased tenfold, and exports of optical instruments and medical equipment grew fivefold. Exports of aircraft doubled, while exports of ships and boats increased eighteenfold, musical instruments thirty-eightfold, and works of art and collectibles 19-fold. Many of these products had never previously been exported to Russia. Despite the EU’s sanctions against Russia, some EU countries continue to trade with Russia through Armenia. Notably, Armenia’s trade turnover with the EU increased 2.4 times in 2023 compared to 2021, especially with countries such as Greece and Cyprus, where Armenian exports surged 39 and 24 times, respectively. This raises questions about the consistency of EU and US policies on sanctions against Russia when the very countries imposing these restrictions engage in trade through Armenia, effectively providing Russia with a “trade lifeline”, thereby indirectly supporting its actions in Ukraine.
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