Despite more than two years of Western punitive measures, Russia is still getting its hands on prohibited goods, with the help of cunning businesses that go to great lengths to dodge the embargo.
Last week, the United States unveiled fresh sanctions against 300 targets in and outside Russia.
“(These) actions strike at their remaining avenues for international materials and equipment, including their reliance on critical supplies from third countries,” said Treasury Secretary Janet Yellen.
It may still not be enough.
“Unfortunately, when people want to commit fraud, it might take some time but they succeed,” Claire Lavarde, a lawyer at international law firm Bryan Cave Leighton Paisner, told AFP.
Russia was hit with a first wave of sanctions following its annexation of Crimea from Ukraine in 2014. The West tightened the screws after Moscow invaded its neighbour in February 2022.
But Russia’s economy has withstood the shock, growing 5.4 percent in the first quarter of this year as its trade relations with Asia and the Middle East soared.
Some business leaders say they cannot always control where their products end up in the supply chain.
“We are not necessarily naive, but there is nothing we can do,” said a senior executive at a European manufacturer of precision machinery who spoke on condition of anonymity.
For legal protection, he said, “our lawyers advised us to have all our clients worldwide sign a document stating that they would not resell our products to Russia, Belarus and Iran”.
Lavarde, whose firm helps banking, luxury and high-tech groups know who they can still work with, said: “One can imagine controlling the first re-export, but not the tenth.”
Despite export controls, Russia “continues to be able to import large amounts of goods needed for military production”, according to a January report by the Kyiv School of Economics and the Yermak-McFaul International Working Group on Russian Sanctions.
Moscow’s imports of “battlefield goods” and “critical components” took a hit in the aftermath of the invasion but they recovered in the second half of 2022 “as Russia was able to adapt supply chains”, the report said.
Russian imports of battlefield goods reached $932 million (868 million euros) between January and October 2023, only 10 percent lower than the pre-sanctions period.
Data compiled by Eric Dor, director of economic studies at the France-based IESEG School of Management, showed that EU exports to Russia of 50 “high-priority items”, such as semiconductors and integrated circuits, fell 95 percent between October 2022 and September 2023 compared to the same period in 2020-2021.
Meanwhile, the study found that EU exports of such items to former Soviet republics, Turkey and the United Arab Emirates soared.
They more than tripled for Kazakhstan, quadrupled for Armenia and jumped almost 1,700 percent for Kyrgyzstan.
“It’s too systematic,” Dor told AFP. These goods, he said, are “clearly” being re-exported to Russia.
The Kansas businessman, Cyril Gregory Buyanovsky, 60, pleaded guilty in December for his role in a “long-running scheme to smuggle sophisticated US avionics equipment to Russia”, Assistant Attorney General Matthew Olsen said at the time.
