Economic researcher: Russia's ways to circumvent sanctions

The ifo assessment is based on an analysis of Russian trade flows. Consequently, Russian imports of important economic goods and components of military importance from these neighboring regions have multiplied in recent years.

“Armenia, Kazakhstan, Uzbekistan, Kyrgyzstan and Turkey exported to Russia fifty times more goods critical to the Russian economy or important for the military industry in 2022 than they exported goods in general to all destination countries in 2019 ”, said Feodora Teti, deputy head of the Ifo Center for Foreign Trade. “This indicates a very high probability of sanctions evasion.”

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How far will Putin go?

Kazakhstan with a central role

According to the study, Russia now imports many semiconductors from Hong Kong. According to the authors, in Central Asia, Kazakhstan plays the main role in circumventing sanctions. Russian imports of data processing equipment from Kazakhstan, among other things, have increased dramatically since 2022.

What is particularly explosive politically is the authors' assessment that Turkey plays a role in circumventing sanctions. Exports of goods from the first list, including mechanical and electrical machinery, are mainly exported through the NATO state.

EU imposes 13th sanctions package

EU states announced a new package of sanctions on Wednesday. Representatives of the 27 Member States agreed to this in Brussels on Wednesday, as announced by the Belgian Presidency of the EU Council. The 13th package is one of the EU's “most comprehensive” to date, it was said following fundamental agreement from member states' permanent representatives.

A formal decision in the written procedure is expected before the second anniversary of the Russian attack on Ukraine on Saturday. The 13th sanctions package targets almost 200 entities and individuals who will be added to the existing sanctions list, the Belgian EU Council Presidency said.

ORF Zikmund correspondent on the new sanctions

ORF correspondent Robert Zikmund talks, among other things, about the new EU sanctions that have been imposed against Russia. It also reports whether the other twelve sanctions packages have had any effect.

Expanded list of sanctioned companies

Other companies that contribute to the military and technological strengthening of Russia or to the development of its defense and security sector will be sanctioned. Military goods and technologies will no longer be allowed to be sold to them from the EU.

European Commission President Ursula von der Leyen wrote on X (Twitter) on Wednesday: “We must further weaken Putin’s war machine.” For the first time, the sanctions also affect companies on the Chinese mainland that supply military material to Russia. Von der Leyen emphasized that the EU was “further restricting Russia's access to drones” with the new punitive measures. Furthermore, Europeans have stepped up the pace when it comes to evading sanctions.

Switzerland wants to prevent sanctions from being circumvented

Switzerland also announced on Wednesday that it would take stricter measures against companies and individuals who want to bypass Russia's sanctions through the neutral country. The State Secretariat for Economic Affairs (SECO) created a team of experts to enforce the sanctions that the Bern government imposed following the Russian invasion of Ukraine almost two years ago. Last year, Switzerland was criticized for not doing enough to combat Russian money in Swiss bank accounts.

Since Russia's attack on Ukraine, the authority has investigated 230 possible sanctions violations, it said. Some of the cases were based on tips from financial companies and customs officials in other countries. This resulted in 47 cases. Nine of them were concluded with the imposition of fines and 20 cases were closed. Around 18 cases are still active and new ones are constantly being added, according to SECO. Most cases involve violations of the ban on exporting goods or luxury products to Russia that could support the Moscow leadership's war effort.

Other countries would now recognize that Switzerland is taking sanctions seriously, said Simon Plüss, head of SECO's export controls and sanctions department. “Switzerland also exchanges information with other countries. Criticism has largely fallen silent.”