The Central Asian country of Kyrgyzstan has been flooded with imported goods, many from Europe, since Russia’s invasion of Ukraine, prompting experts to question the international community’s commitment to its sanctions regimes.
In response to the February 22 invasion, the European Union, the United States and other countries hit Moscow with sweeping sanctions targeting financial services and energy exports, as well as restrictions on trade and technology vital to the Russian defense industry’s dual-use technologies, which are essential for military purposes.
These sanctions have been steadily tightened, aimed at hampering Russia’s economic and military capacity, but companies are taking advantage of the hubs of illicit trade that have emerged in countries such as Kyrgyzstan.
Exports to Kyrgyzstan from Eastern Europe took off immediately after the February 2022 invasion, according to the International Monetary Fund (IMF) and national statistics charted by the Washington, DC-based Brookings Institution.
Robin Brooks, a senior fellow at the think tank, wrote: “We have seen a massive increase in exports from Serbia to Kyrgyzstan. Similar spikes are happening all over Eastern Europe: Romania, Bulgaria, Hungary. None of this is obviously going to Kyrgyzstan. It’s all going to Russia…” he wrote on X (formerly Twitter).
Export values with Kyrgyzstan increased from around $1 million per month for Hungary and less than $1 million in the case of the other three countries to over $4 million (Romania), $4.5 million (Bulgaria), around $9 million (Hungary) and over $30 million (Serbia).
Another set of charts released last week by the Brookings Institution illustrates the surge in exports from Central and Western European countries to the former Soviet bloc state over the past two years.
The value of German exports rose from less than $10 million in March 2022 to about $80 million before falling back to less than $70 million in July. Italian and Austrian exports rose from about $1 million or less to nearly $40 million and $8 million, respectively.
Natalia Kolesnikova/AFP via Getty Images
The value of Polish exports increased from a few million to around $50 million in 2023. However, the chart then shows a sharp decline this year, with Poland officially exporting only $20 million to Kyrgyzstan in July.
“Are we seriously to believe that nothing can be done to stop the shameful flow of transshipments to Russia via Central Asia? Come on, it’s just a matter of lack of political will,” Brooks wrote in a post on X.
Peter Stano, EU spokesman for foreign affairs and security policy, called eliminating sanctions workarounds a “top priority”.
“We are stepping up our efforts to ensure that sanctioned EU products, in particular those used in Russian military systems, do not reach Russia via third states,” he said. Newsweek.
In addition to cracking down on efforts to circumvent the EU’s trade embargo on Russia, the 27-member bloc has stepped up diplomatic engagement with platform countries, or potential hubs where exporters can circumvent trade embargoes, with the EU’s special envoy for sanctions, David O’Sullivan, “in constant contact” with governments of countries at “high risk” of circumvention, particularly in Central Asia.
“We appreciate the openness of Central Asian countries to cooperate with the EU on this important issue and we see promising results from the strengthened export control measures, which have resulted in encouraging trade statistics with direct exports of priority goods to Russia down significantly,” O’Sullivan continued, while acknowledging that more work remained to be done in these “high-risk” areas.
He said the EU was “working closely” with the US and UK to “stop the re-export of sensitive items to Russia, with a focus on the EU’s list of common priority goods, such as advanced electronics, precision tools and integrated circuits that could support Moscow’s industrial base in times of war.”
In March, the IMF’s Middle East and Central Asia Department reported a dramatic change in Kyrgyzstan’s trade dynamics.
Officially, the country’s exports have fallen 18% since 2021, the year before Russian President Vladimir Putin launched the invasion, while imports have soared 76%, “making the overall economy much more dependent on foreign trade.”
Two countries, Russia and China, account for an increasingly large share of Kyrgyzstan’s trade.
In terms of imports, China’s share increased from 26% in 2021 to almost 42% the following year. At the same time, goods shipped to Russia more than tripled, from 14.3% to 48% of Kyrgyzstan’s total exports.
The Polish, Austrian, German and Italian trade ministries, the U.S. Treasury and the Russian Ministry of Economic Development did not immediately respond to written requests for comment.
