China, Turkey and Cyprus circumventing Russian sanctions, UAE a particular concern for Western allies

Russian customs data shows that countries most actively facilitating circumvention of wartime sanctions by Russia include China, Turkey, Cyprus and the UAE, according to analysis by the Free Russia Foundation (FRF).

Western allies are responding by calling on jurisdictions to curb exports of critical goods to Russia as they seek to starve President Vladimir Putin’s armed forces of the weapons and components they need to sustain Moscow’s war against Ukraine.

Coming under notable pressure recently is the UAE, from where exports to Russia since the invasion of Ukraine have increased by a massive amount more than they have in other countries.

Drones and microchips

The FRF analysis identifies and examines sanctions-related changes in trade volumes, costs and geographies following Russia’s full-scale invasion of Ukraine in February 2022.

In particular, the analysis examines Russia’s imports of drones or unmanned ariel vehicles (UAVs) and microchips, two categories of controlled commodities critical to the Kremlin’s ability to wage war and sustain military aggression.

Deliveries of drones continued to Russia as late as November and December from UAE, Hong Kong, China, and Singapore according to the analysis. It says Russia’s imports of microprocessors or semiconductors increased from US$1.82 billion in 2021 to US$2.45 billion in 2022.

Dramatically increased exports

Notably, during the first three quarters of 2022, some countries have actually dramatically expanded their exports to Russia. They include China, NATO member Turkey, EU member state Cyprus, Uzbekistan and the UAE.

The increase in exports to Russia from the UAE during the period increased by a massive 350 per cent, substantially more than other countries that exported, at most, barely more than 100 per cent more during the period.

Western pressure on UAE

Officials from the US, EU and UK have in recent weeks visited the UAE to press the country to clamp down on suspected sanctions busting, according to an article in the Financial Times.

It says James O’Brien, head of the US office of sanctions co-ordination, joined EU sanctions envoy David O’Sullivan, and David Reed, director of the UK’s sanctions directorate, in a visit to the UAE last month to press their case, which centres on concerns about re-exporting activities.

The FRF report, Effectiveness of US Sanctions Targeting Russian Companies and Individuals, can be downloaded from here.

The Financial Times article, West presses UAE to clamp down on suspected Russia sanctions busting, can be found here.


Categories: Trade Based Financial crimes News

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