Page 50 - bne magazine February 2024_20240206

50 I Eastern Europe bne February 2024
Western sanctions on technology exports to Russia have failed as a third of the imports used in making Russian weapons come from western companies, mostly via "friendly countries." / bne IntelliNews
Russia imports a third of battlefield technology from western companies
Kyiv School of Economics
Western sanctions on technology exports to Russia have largely failed as a third of its imports used to make new weapons come from Western companies, usually via the “friendly countries”, Kyiv School of Economics (KSE) said in its latest report.
“Coalition authorities need to address the role of third-country intermediaries in export controls circumvention schemes, including those in China, Turkey, and the UAE. They can do so by imposing sanctions on entities that have been found to facilitate export controls violations involving any companies or individuals from coalition countries,” says KSE.
Hong Kong emerges from the study as a partularly important node in this trade.
In all, foreign-sourced critical battlefield components worth $7.3bn have arrived
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from companies based in the US and its allies last year, KSE estimates.
“The analysis shows that, while export controls have had some effect on trade flows, Russia continues to be able to import large amounts of goods needed for military production,” KSE said in a report shared with bne IntelliNews. “Since the imposition
of restrictions, supply chains have adapted and most of the items in question now reach Russia via intermediaries in third countries, including China. Almost half of the imports in the first ten months of 2023 consisted of goods that were produced on behalf of companies from coalition countries, indicating major enforcement challenges.”
Foreign missile components in Russian weapons by country of producer
Sources: NACP, UA War Infographics, KSE Institute.