Economist: Russia's Ways to Avoid Sanctions

The ifo rating is based on an analysis of Russian trade flows. Accordingly, Russian imports of important economic goods and military-critical components from these neighboring regions have increased manifold in recent years.

“Armenia, Kazakhstan, Uzbekistan, Kyrgyzstan, and Turkey exported fifty times more goods to Russia in 2022 that are important to the Russian economy or important to the military industry than they exported to all target countries in 2019,” Feodora said. Vice President of the ifo Center for Foreign Trade: “This means that sanctions are avoided.”

Kazakhstan plays an important role

According to the study, Russia now imports a lot of semiconductors from Hong Kong. According to the authors, Kazakhstan plays an important role in avoiding economic sanctions in Central Asia. Russian imports of data processing equipment from Kazakhstan, among others, have increased dramatically since 2022.

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

The European Union has imposed 13 economic sanctions

EU countries announced new economic sanctions on Wednesday. Representatives of the 27 member states agreed to this in Brussels on Wednesday, as announced by the Belgian EU Council Presidency. The 13th package is one of the EU's “most comprehensive”, as stated by the permanent representatives of the member states after the basic treaty.

A formal decision on the written procedure is expected ahead of the second anniversary of the Russian invasion of Ukraine on Saturday. The 13th sanctions package targets nearly 200 companies and individuals to be added to the existing sanctions list, according to the Belgian EU Council Presidency.

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ORF reporter Zygmunt on the new bans

ORF reporter Robert Zygmund talks about new EU sanctions against Russia. He also reports whether the other twelve prohibitions had any effect.

The list of approved companies has expanded

Additional companies that contribute to the strengthening of Russia's military and technology or the development of its defense and security sector should be allowed. They will not be allowed to sell military equipment and technology from the EU.

EU 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 supplies to Russia. Von der Leyen stressed that the EU is “further restricting Russia's access to drones” with new punitive measures. In addition, the Europeans have tightened their speed when avoiding obstacles.

Switzerland wants to prevent sanctions violations

Switzerland also announced on Wednesday that it would take more action against companies and individuals trying to circumvent Russia's sanctions through a neutral country. The State Secretariat for Economic Affairs (SECO) set up a committee of experts to implement the sanctions imposed by the government in Bern after the Russian invasion of Ukraine almost two years ago. Last year, Switzerland came under fire for not doing enough to combat Russian money in Swiss bank accounts.

After Russia's attack on Ukraine, the commission investigated 230 potential sanctions violations. Some cases are based on tips from financial institutions and customs officials and other countries. This resulted in 47 cases. Nine of these cases were fined and terminated and 20 cases were discontinued. According to SECO, about 18 cases are still active and new ones are constantly being added. Most of the cases involve violations of the ban on exporting luxury goods or products to Russia that could support the war effort of the leadership in Moscow.

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Other countries will now recognize that Switzerland takes sanctions seriously, said Simon Plus, head of SECO's Export Controls and Sanctions Department. “Switzerland also exchanges information with other countries. Criticism has largely been muted.

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