WSJ: Goods from West find supply channels to Russia through former Soviet republics

A cluster of ex-Soviet republics is a hub for shipments of U.S., European dual-use goods to Russia.

A group of former Soviet republics has emerged as a major transhipment hub for U.S. and European computer chips, lasers and other products with civilian and military uses headed for Russia, according to Western officials and data compiled by The Wall Street Journal (WSJ).

U.S. and European Union exports of sensitive, so-called dual-use goods to countries in Russia’s neighbourhood rose sharply in 2022. So did these countries’ shipments of these products to Russia, often by a similar multiple, an analysis of United Nations trade data shows.

The data suggests Moscow continues to acquire crucial Western goods—whose sale is mostly restricted by U.S. and European sanctions—as it seeks to keep its economy afloat and its war machine running.

In total, U.S. and EU goods exports to Armenia, Georgia, Kyrgyzstan, Uzbekistan and Kazakhstan rose to $24.3 billion last year from $14.6 billion in 2021. These countries collectively increased their exports to Russia by nearly 50% last year to around $15 billion.

This booming trade route—which analysts at the European Bank for Reconstruction and Development call the Eurasian roundabout—is a sign of Russia’s success in finding new ways to acquire sought-after goods despite Western sanctions, European officials say.

Russian companies advertise their ability to acquire sanctioned goods this way. For example, Imex-Expert offers to “import sanctioned goods from Europe, America to Russia through Kazakhstan.” Its website boasts: “Bypassing sanctions 100 per cent.”

Digging into the numbers shows a substantial trade in dual-use items. The U.S. and the EU exported more than $8.5 million worth of integrated circuits to Armenia last year, for instance, more than 16 times the $530,000 exported in 2021, according to U.N. data.

At the same time, Armenia’s exports of the circuits to Russia jumped to $13 million from less than $2,000 in 2021.

A similar picture emerges with Western shipments of lasers to Kyrgyzstan and measuring instruments, including tools for checking voltage and power, to Uzbekistan. Both countries saw a boost in those exports to Russia.