Sanctioned goods find their way to Russia; the new sanctions package promises to eliminate detours / Article

Tens of millions worth of goods, probably leaving Latvia via Kyrgyzstan, Kazakhstan and Armenia, end up in Russia. When collecting data, both the Ministry of Foreign Affairs and the State Revenue Service agree to it.

For example, the value of exports to Kyrgyzstan increased 3.5 times last year, reaching a value of almost 24 million euros, while in 2021 the value of exports to this country was just under 7 million euros.

The same can be observed when looking at export data to Kazakhstan. 2.5 times increase, reaching a value of 118 million euros.

And also to Armenia a 2.7 times increase in export value compared to 2021.

The exported goods are not products of Latvia. It is mostly re-export of European products in the following product categories – machines, mechanisms, electrical equipment. The largest increase in exports to these countries is for the groups of goods that are subject to sanctions and must not enter Russia. This is confirmed by the SRS Customs Administration, seeing that criminal proceedings were initiated last year for the transportation of goods. Although exports to Kyrgyzstan, Kazakhstan, Armenia are allowed, there have been cases where it is clear to customs officials that an attempt is being made to circumvent sanctions.

“This has been evidenced by individual cases when we have found a double set of documents at the carrier. But there are not many such cases,” says Raimonds Zukuls, Director of the Customs Administration of the SRS. “We have seen illogical routes. We have checked and concluded that there is no production site indicated. Some Kyrgyz plant is indicated, which does not exist at all.”

But in most cases, customs officials cannot do anything. Most often, everything is fine with the papers.

“Legal companies are established in these countries (..) These goods are legally delivered to those countries and then they end up where they don’t need to be. In Belarus or Russia,” says Zukul.

Communication with the services of neighboring countries is underway, says the customs. Lithuania has the same problems. Exports to Belarus have significantly increased there, because the sanctions for Belarus and Russia are different. And what cannot be taken to Russia is taken to Belarus, and no one knows where the cargo goes next.

It is also quite clear to the Ministry of Foreign Affairs that the circumvention of sanctions is being implemented, but it is difficult to provide evidence for this. The ministry mentions that it cooperates, for example, with Kazakhstan, and hopes that the solution would be not to subject Kazakhstan to sanctions, but to find some way for their services to combat the circumvention of sanctions.

“The government of Kazakhstan has always said that it does not support the circumvention of sanctions and has shown a desire to cooperate. We are currently in contact with their Ministry of Foreign Affairs to understand whether their statistics show the same as our statistics,” explains Deputy State Secretary of the Ministry of Foreign Affairs Andrzej Wiļumsons.

Reports from the Baltic States on possible widespread sanctions violations have also been heard by the European Commission. This is being considered when developing the tenth sanctions package, says the President of the European Commission, Urzula von der Leyen.

“For the maximum effect, we will deny various industrial benefits. Those that cannot be obtained through cooperation with third countries,” stresses the President of the European Commission, Urzula von der Leyen. “With this, we’ve banned all electronics that can be used on the battlefield. And we’re going to make sure they can’t find other ways to get them.”

But the exposure of third countries to sanctions is not mentioned. Also, the Ministry of Foreign Affairs states that circumvention of sanctions on a large scale is likely to occur with goods for agricultural use, rather than those for military use. Discussions on the tenth package of sanctions will continue.

On February 19, the program “De facto” also analyzes this topic in depth.

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