The punitive measures applied by the European bloc have deprived Moscow of several products, equipment and raw materials that are essential to keep the economy above the water line and to fuel its war effort. However, the Kremlin has alternatives outside the law to circumvent the embargoes.
The Russian government may resort to new trade routes to bring goods to the country that are now denied to them by the coalition of Western countries and their allies, ‘Politico’ advances this Thursday. Russian President Vladimir Putin will have at his disposal a list of countries that can help Russia circumvent sanctions, some of them within the borders of Europe itself.
Turkey could be one of those countries with the capacity to help Moscow get the products it needs. Despite being considered a European nation, Turkey has not shown support for the sanctions regime launched by Brussels on Russia, despite enjoying privileged access to the common European market.
Cited by the same media, a former member of the US Treasury Department says that the United Arab Emirates are also part of the group of countries that are “at the forefront” of evading European sanctions.
But even within the EU, there may be states that want to maintain trade flows with Russia, contrary to Brussels guidelines, although this is an unlikely scenario, considering the costs that non-compliance entails, in addition to the reputational damage they may suffer in the eyes of of the international community.
Another line of support will be in the nations that are part of the Eurasian Economic Union, a version of the EU in the region where Russia is predominant in Eastern Europe and in the Western region of the Asian continent and which is made up of former Soviet republics. Thus, Moscow will be able to intensify regular trade with Belarus, Kazakhstan, Armenia and Kyrgyzstan, although the possibility cannot be ruled out that, in addition to legal exchanges, goods are imported that are sanctioned.
However, these countries risk secondary sanctions if it is discovered that they are helping to import products, technology and other items into Russia that are the target of Western punitive measures, so their participation in circumventing sanctions cannot be taken as certain.
But it is not just at the level of imports that Russia may seek to circumvent sanctions. Also in export flows, essential to keep state coffers in good condition and to finance the war in Ukraine, it is possible that the Kremlin is considering ways to continue to deliver fuel to EU countries.
One of the tactics can be the transfer of products from the open sea, from a Russian vessel to another in the receiving country, a practice that has already been witnessed. Another strategy will be to disable the ships’ geolocation systems, so that they can be “invisible” to the radar systems. ‘Politico’ states that this practice is legal and that it has been widely used by Russia since the beginning of the war against Ukraine.
Although it is possible to determine the origin of fossil fuels through laboratory analysis, even if the origin labels are changed, it will hardly be possible to determine without a shadow of a doubt where this product came from, which gives the carrier the “benefit of the doubt”.
Despite the harsh sanctions that have been levied on Russia and the fact that mechanisms have been put in place to report practices that violate these punitive regimes, it would be unwise to think that it is possible to detect all offenders, allowing Russia to continue to receive revenue from the trade in products. sanctioned.
Information from the ‘Geopolitical Intelligence Services’ reveals that the United States is the leading country in sanctions efforts against Russia, with 1,194 punitive measures, followed by Canada, with 908, and Switzerland, with 824.
On June 3, the European Commission put forward a sixth package of sanctions on Russia that provides, among other measures, for an almost total cut off from Moscow oil and an increase in the list of targeted persons and entities, which currently includes 98. entities and 1,158 individuals with ties to Putin.
The International Monetary Fund predicts that the Russian economy will contract by 8.5% in 2022 and that exports are expected to fall by almost 25% by the end of the year. However, estimates by the ‘Center for Strategic and International Study’ point to a drop of up to 10% in the Russian economy this year and 1.5% in 2023.