While the President of Ukraine, Volodymyr Zelensky, during his new European tour, this time through the Baltic countries, is busy soliciting more help to defeat Russia on the front lines; while the Atlantic Alliance, meeting this Wednesday in Brussels, committed to spending “billions” of euros to provide military support to Kiev, particularly in its air defense; While all this happened within 48 hours, Moscow spent almost 56 million euros on purchasing war supplies. This is despite trade restrictions approved in the West following the full-scale invasion that began on February 24, 2022. This emerges from a report published this Thursday by the Center of the Kyiv School of Economics (KSE) and the Yermak-McFaul Group, led by Presidential Chief of Staff Andrii Yermak and former US Ambassador Michael McFaul, Russian imports have increased of war goods has largely recovered from its sharp decline following the introduction of export controls.
The study was prepared by monitoring commercial databases and is titled “Challenges in the Application of Export Controls.” As Russia continues to import components for its military production, the average monthly Russian expenditure on importing goods destined for the battlefield (communications equipment, electronic components or semiconductors for exclusively military use) is estimated at $932 million (851 million euros). . among others) from January to October 2023, the period analyzed. This amount is only 10% less than Moscow's spending before trade sanctions.
In addition, 48.5% of these goods would come from one of the coalition countries that precisely implemented the restrictions. This does not mean that the seller, based in the United States, Australia, Japan, the United Kingdom or any other member state of the European Union, knowingly negotiates with Russian companies, but that the trace of his sales until then is lost in a complex network of third countries, Moscow's direct partners, especially China, regulate all sections in the mapping of imports of these goods to Russia as a country of production (47%), country of origin (66%), simply seller (40%) or country of product delivery (56%). ―, but also Turkey and the United Arab Emirates, the report says.
However, the report points out that the purchase of other products fundamental to the war machine, although intended for a dual civil or military purpose, has fallen by more than 28%, compared to 2,933 million euros per month, which Russia spent before February 2022 on average 2,092 million in the first 10 months of last year. That said, according to senior CFE researcher Olena Bilousova, post-invasion export controls can and did work. “They are forcing Russia,” Bilousova continues from the center’s headquarters in the Ukrainian capital, “to look for new trade routes and thereby spend more money.” But it is not enough. “If new measures were adopted, we would have more impact,” he continues, “but if we stop, we would lose what we have achieved so far.” Among the study's recommendations is a coordinated effort by sanctioning countries across institutions , financial institutions, companies and even civil society. “That we achieve,” emphasizes this analyst, “a framework similar to that of international money laundering control.”
The report is relevant not only for what it says, but also for the moment. As the full-scale invasion began, a coalition of countries including the US, the UK, EU members, Japan, Australia, Canada and South Korea extended an unprecedented framework of export controls to Russia – and broadened the scope of the measures adopted after illegal annexation of Crimea and the invasion of the Donbass region in 2014―. By this point, Russia had supplies and its industry was already geared for war – purchases of battlefield goods also skyrocketed in late 2021 as the invasion was being prepared. The effect of a sanction would take a while. “But any kind of delay [en los efectos de las sanciones] is over,” warns Bilousova. Either they work or they don't.
Change in trade routes
Join EL PAÍS to follow all the news and read without restrictions.
Subscribe to
According to research by the KSE and the Yermak-MacFaul Group, it is certain that Russia is suffering from shortages of some valuable products from Western companies due to export restrictions, particularly in the electronics sector. The trade routes for this material have also changed. Bilousova points out how, for example, by analyzing commercial databases, they were able to detect changes in the group of Chinese suppliers to Russia, as some of the Asian giant's companies were added to the North American Department of Commerce's blacklist; or how a Russia-allied country like Kazakhstan went from zero semiconductor imports to multiplying its purchases starting in February 2022.
Although the impact is moderate, Western surveillance continues. An example is the addition of 42 new companies to the US blacklist on December 6 for supplying the Russian army, including material for the production of drones together with Iran at the new facilities in Tatarstan – Russia brought more in December alone than 600 unmanned devices onto the market as explosive projectiles against Ukrainian territory. For example, the reported companies included four based in Cyprus, three in Belgium, one in Germany and one in the Netherlands. As a result of this action, Belgian businessman Hans Maria De Geetere, 61, was arrested as part of an operation between Belgian authorities and the FBI.
The report, “Challenges in the Application of Export Controls,” highlights precisely the possibility that U.S. legislation creates to prosecute products that, although not corresponding to a manufacturer based in the United States, have in their composition a although only minimal, contain North American origins. But theory is one thing, practice is another. Ukraine's National Agency for Prevention of Corruption was able to identify 2,800 weapons used by Russia in its offensive – missiles, drones and military vehicles. Of these, 95% come from producers in coalition countries; 72% of them come from the United States.
One of these companies is Texas Instruments. An internal Ukrainian executive branch report accessed by EL PAÍS identifies Texas Instruments products in components of the Shahed drones used by Russia. In April last year, in light of information about the arrival of this company's microchips on the Russian market, despite the sanctions, the board of directors of the technology company voted against internally tightening control over the improper use of its products.
Follow all international information on Facebook and Xor in our weekly newsletter.
Subscribe to continue reading
Read without limits
_