Armenia serves as Russia’s main logistics hubs for circumventing sanctions Against US, EU interests

The Sofia Global, based in Bulgaria, has published an article on Armenia's assistance to Russia to dodge West-imposed sanctions. Caliber.Az reprints the article.

On February 18, Armenian Prime Minister Nikol Pashinyan, during a meeting with the Armenian diaspora in Munich, Germany, announced that Yerevan is not Moscow’s ally on the issue of Ukraine.

Pashinyan emphasised that he regrets the inability to influence the conflict between Russia and Ukraine. The head of the government of Armenia, which after 2022 became the 4th largest exporter of semiconductors and other dual-use goods for war needs to the Russian Federation, in his speech called the Ukrainian nation “friendly”.

Official Yerevan, which has been actively creating the impression of reorientation towards the West, has served as one of the Kremlin’s main logistics hubs for circumventing sanctions throughout the two years of the war between Russia and Ukraine.

In 2022, the GDP of tiny Armenia, with a population of three million, grew by an unprecedented 14.2 per cent. The UK’s Telegraph said of this: “The most absurd thing is the economic growth of Armenia… which makes it a candidate for third place in the list of the fastest growing economies in the world”.

On November 27 2023, Armenia’s Deputy Minister of Finance Vahan Sirunyan admitted that over nine months in 2023, exports of goods from Armenia to the Russian Federation increased by 85 per cent, of which 80 per cent were re-exports.

Emphasising the exponential growth of Armenia’s foreign trade turnover by 69 per cent after the start of the war in Ukraine, US think tank Jamestown Foundation also warned about the re-export of sanctioned goods from Armenia to the Russian Federation.

The director of the Office for Sanctions Coordination of the US State Department, Jim O’Brien, directly stated that Washington classifies Armenia as a country helping the Russian Federation to circumvent sanctions.

In 2024, the talk about the problem continues, but this does not in the least prevent Armenia from supplying sanctioned goods to its belligerent neighbour with impunity. Robin Brooks, director of the Institute of International Finance and former Goldman Sachs strategist, published updated data on February 17: “Armenia’s exports to Russia are up 430 per cent from before the invasion, which is about re-export of EU and Chinese goods to Russia”.

For two years, the problem of Armenian re-export has been noticed not only by politicians, think tanks and leading economists, but also by the international media.

In March 2022, just over a month after the Russian invasion of Ukraine, the Canadian analytical site Geopolitical Monitor reported, “Armenia is the best-placed member of the EAEU countries to help Russia break sanctions.”

The situation has not improved even after a year of strengthening Western sanctions against the Kremlin aggressors. In March 2023, the major Ukrainian news site Unian reported that “Armenia is becoming an economic rear for the Russians, closing for Moscow the problems with the supply of sanctioned goods and weapons to the Russian market.”

According to the Bulgarian publication Факти, “Putin’s authoritarian regime is circumventing embargoes and trade sanctions imposed by the EU, US and Britain through neighbouring countries… especially Armenia.”

The Washington Post predicted in May 2023 that “The West could turn up the heat on Armenia, from which the re-export to Russia of a range of critical goods, including electronics, has spiked.”

However, by the end of the year, the Swiss newspaper L’Agefi explained that “Armenia is directly involved in the re-export of sanctioned products to Russia.”

Moscow’s use of Yerevan as an ally to circumvent Western sanctions was also noticed in the Middle East. In December 2023, Israeli TV channel I24 said that “Armenia is a major hub for the supply of goods to Russia, bypassing Western sanctions, and a military-technical supply base for Russian troops”.

Armenia is so important for Russia as a transit hub because Putin can no longer count on almost anyone other than Armenia in the field of re-export of sanctioned goods.

In May 2023, the French division of Forbes called Armenia “the main channel for evading sanctions” as “restrictions on supplies through Turkey and Central Asia are tightening.”

In summer 2022, Ankara promised the US that it would not allow sanctions against Russia to be circumvented on Turkish territory. Subsequently, Turkish financial organizations began to stop cooperation with Russian ones en masse. And in February 2024, even the Russian newspaper Vedomosti noted that Turkish banks have been closing accounts of Russian companies since 2022, “but now this process has really intensified”.

After the outbreak of the war in Ukraine, the countries of Central Asia also repeatedly received warnings from the United States and the EU regarding the need to comply with sanctions against the Russian Federation.

Companies that, despite restrictions, continued to cooperate with Moscow, were included in the American sanctions list.

To check compliance with sanctions against the Russian Federation, EU Special Envoy David O’Sullivan made three visits to Central Asia in 2023. During the latter, which took place in November, he thanked the countries of the region for their assistance in reducing the re-export of goods to the Russian Federation.

A month earlier, on October 23, the foreign ministers of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan, at a meeting with EU representatives in Luxembourg, promised to help fight Russia’s attempts to circumvent the imposed sanctions.

Despite the coverage of the problem of re-export of sanctioned goods from Armenia to Russia by the world media, the international community is inactive, and Armenia gets away with everything.

The Croatian publication Net noted back in May 2023 that the United States and the EU, which had been supplying multimillion-dollar weapons to Ukraine for the war against the Russian Federation, for unknown reasons, turned a blind eye to the close partnership between Yerevan and the Kremlin. The publication is echoed by the French Forbes: “If the Western community really wants a speedy victory for Ukraine, it should deprive Moscow of this logistics hub as soon as possible.” In this regard, US’s Jamestown Foundation reported that “…any comprehensive investigation has not been initiated…” regarding Putin’s logistics hub in Armenia.

In April 2023, the Telegraph already called on the West “to get tough with some former Soviet satellites”. “Armenia has little excuse when allowing itself to act as a third-country transit point (for the Russian Federation). 

Instead of introducing restrictions against Armenian-Russian cooperation, which contradicts the interests of Washington and Brussels, the US Agency for International Development (USAID) on February 17 announced the allocation of $15 million to Yerevan. It is ironic that the USAID statement notes that these funds are aimed at “reducing Armenia’s economic dependence on the Russian Federation.”