The Role of Armenia in Circumventing Sanctions Against Russia: Implications for Ukraine and the West

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The distribution hubs of Russia. Ukraine’s victory depends on the EU and US blockade of re-export channels

Author: Igor CHALENKO, political scientist (Kiev, Ukraine)

While the EU and the US search the Far East for private companies that violate the sanctions regime against Vladimir Putin, Armenia continues to increase trade with the Russian Federation at the expense of re-exporting sanctioned goods.

The leading media of Europe and the United States regularly tell us about how Armenia operates as the Kremlin’s main logistical hub for its aggression against Ukraine. In Kiev, they are already publicly cursing the authorities in Yerevan for their support for Moscow. Following the measures taken by Turkey and a number of former Soviet republics from Central Asia to limit illegal supplies to Russia, Armenia’s importance to Moscow has further increased. Officials in the EU and the US already have evidence on this occasion, but for unclear reasons are in no hurry to block this channel for supplying the aggressor state.

On May 8, 2023, the British newspaper The Financial Times (FT) reported that the European Commission (EC) was preparing sanctions against a number of Chinese companies supplying microcircuits and electronics to the Russian military industry.

Washington and Brussels are searching around the world for the companies involved in the illegal supply of equipment and goods to the Russian Federation. At the same time, they exert massive pressure on the countries that Moscow uses to circumvent the sanctions. As a result of pressure from Europe and America, in the period March – May 2023, Turkey, Kazakhstan and Uzbekistan began to take serious measures to block the so-called parallel import to the Russian Federation.

Turkey

On March 20 of this year, the British agency Reuters reported that “the Turkish government has provided the companies in the country with the list of prohibited foreign goods for supplies to the Russian Federation, as of March 1.”

On April 9, 2023, the head of the US State Department’s Sanctions Coordination Office, Jim O’Brien, stated that “Turkish officials have made it very clear the ban on re-exports of Western goods to Russia”: “Ankara has provided a verbal assurance to the European Commission that from March 1 the goods included in the sanctions list will not be delivered to the Russian Federation”.

Kazakhstan

On 23 March 2023, the FT noted that “Kazakhstan will control goods passing through the country for re-export”. “They understand all the risks of secondary sanctions, so bilateral trade with all partners is closely monitored,” according to a senior official in Astana. At the end of April, Kazakhstan was visited by associates of the US Treasury Department in order to strengthen the control over compliance with sanctions against the Russian Federation.

“Astana remains a fully transparent partner with our American, European and British partners,” he announced on May 2 of this year. Kazakhstan’s ambassador to Washington Erzhan Ashikbayev. According to him, Kazakhstan “is a supporter of compliance with sanctions and of not assisting attempts to circumvent them.”

Uzbekistan

On February 28 of this year The Central Bank of Uzbekistan issued an official warning to three private banks in the country regarding the need to comply with the sanctions against the Russian Federation. In the period March-April 2023, the US imposed sanctions against Uzbek companies that are closely connected to Russia. “If there are any illegal transactions, if, let’s say, we see that some economic entities of Uzbekistan are involved, they will absolutely be subject to sanctions,” the EU’s special envoy for sanctions policy, David O’, said on April 27, 2023 Sullivan, quoted by Gazeta.kz.

The main channel for circumventing sanctions

As supplies through Turkey and Central Asia become increasingly limited, Moscow is increasing parallel imports through Armenia. In the period January – March of this year trade between the two countries increased by as much as 2.4 times. And this despite the fact that in 2022 Armenian exports to Russia have already jumped to a record 2.4 billion dollars, which is an increase of 185.7% compared to 2021.

As early as March 2, 2023, the Tripartite Note by the Department of Justice, the Department of Commerce, and the US Department of the Treasury mentioned Armenia as one of the “distribution points commonly used for the illicit supply of (sanctioned) restricted goods to Russia and Belarus”. “Goods circumvent sanctions by importing from third countries. For example, exports from Armenia to Russia jumped by 49% in the first half of 2022,” reported the American television ABC News on March 13.

On March 21 of this year Channel 5 TV (Ukraine) reports that “Armenia is actively helping Russia circumvent Western sanctions imposed as a result of its aggression against Ukraine”: “We are talking about supplies from Europe and East Asia not only of goods for civilian use, but also on equipment for the Russian military industry”. “In this way, Yerevan, which is persistently trying to create the impression of a reorientation towards the West, actually becomes an accomplice of the Putin regime,” Ukrainian television stated.

“Armenia plays the role not only of a logistics hub, but also of a center for the military-technical supply of the Putin regime’s aggression against Ukraine,” commented a leading Ukrainian publication, Telegraf.ua, on March 23, 2023.

“Against the background of the war in Ukraine, trade between Yerevan and Moscow is literally “flying up”: in 2022, Armenian exports to the Russian Federation were 2.4 billion dollars, which is an increase of 185.7% compared to 2021. At the same time, the Russian import to Armenia was about 2.6 billion dollars, which is an increase of 44.5%”, writes the Ukrainian media.

In this context, Telegraf.ua recalls the statement of Ukrainian Prime Minister Nikol Pashinyan from February 2 of this year, when he “not without pleasure” stated: “Our trade and economic cooperation marks… good and great growth.” On March 26, 2023, the Ukrainian news media Today.ua announced the data of the Main Directorate for Intelligence of the Ministry of Defense of Ukraine, according to which “Russia conducts regular negotiations with the Armenian side regarding the supply of sanctions goods for the needs of the enemy.”

“Putin’s authoritarian regime circumvents the embargo and trade sanctions of the EU, the USA and the UK, introduced because of its aggression against Ukraine, through the countries of the former Soviet Union, especially Armenia,” wrote the authoritative Bulgarian publication Fakti on March 27, 2023. bg

The same day, Lithuanian news site Alfa warned that “while the EU and others Western powers are trying to destroy the sanctions announced against Russia because of its aggression in Ukraine, Moscow has found a new route to circumvent them”: “From laundries to Iranian combat drones, their path to the Russian Federation passes through Armenia”.

“The drones, with which Ukrainian energy and infrastructure facilities are regularly attacked, due to which the Republic of Moldova is also regularly left without electricity, are delivered to Russia from Iran thanks to the cooperation of Armenia,” he wrote on March 28 of this year. one of the most popular Moldovan news media Știri.

On March 29, one of the leading newspapers in Romania, Adevărul, confirmed the information that “Armenia functions as one of the main Russian hubs for the procurement of goods in the EU and East Asia”: “The aim is to circumvent the international sanctions imposed on the regime in Moscow”.

“Armenia serves as a large-scale hub for the supply of sanctioned goods, including military goods, which are used for Putin’s aggression in Ukraine, with the Caucasian country also providing the direct connection between Iran and Russia,” EUreporter informed on April 2.

On April 14, 2023, and The Telegraph warned that “it is high time the West hardened relations with some former Soviet satellites to ensure the complete isolation of the Kremlin’s war machine.” “The most absurd are the statistics of economic growth of Armenia, whose 13% growth in just 12 months makes it a candidate for the 3rd place in the list of the fastest growing economies in the world,” the British newspaper ironized: “There are no excuses for Yerevan, after acting as a transit point…”.

The fight against the circumvention of sanctions was also discussed at one of the meetings between representatives of the EU and the USA, the leading American newspaper The New York Times wrote on April 18, and according to the publication, “documents were examined that prove the growth of exports through Armenia to Russia on electronic items that are used in the military industry’. However, for unclear reasons, sanctions against the authorities in Yerevan were not discussed at this meeting.

“Recently, numerous publications in Western and Eastern Europe have detailed Armenia’s role in the Russian-Iranian coalition and in the illegal supply of equipment, including for the defense industry, which is then exported to the Russian Federation,” he wrote on May 3, 2023 d. the Romanian edition of the leading American magazine Newsweek.

The tension reached such a point that on May 4, one of the most famous Ukrainian journalists and TV presenters, Dmitry Gordon, publicly cursed the leadership of Armenia. “When people die in Ukraine, including children, from Russian missiles and bombs, as well as Iranian drones, I curse not only Moscow,” Gordon fumed. “I curse all those who help the Russians to kill Ukrainians: I curse both Iran and the authorities of Armenia, which carries out the re-export…”

It is surprising that with so many extreme alarm signals available, intelligence data of a number of EU and US departments, as well as the indicators of the official statistics of Armenia, Brussels and Washington did not take any measures to block the main channel for circumventing the sanctions against the Kremlin .

Is it because of some geopolitical motives, America and the European Union are ready to turn a blind eye to the close partnership of the authorities in Yerevan with the Putin regime. Doesn’t a red light light up for them with the official curses from Kiev?

If Western society really wants an imminent victory for Ukraine, it must urgently deprive Moscow of this “logistical hub” provided for Putin by the Pashinyan regime. It is high time that Brussels and Washington organized a total blockade on the illegal supplies of apparatus and equipment for the Russian military industry carried out from and through Armenia.