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5.2.1 Import/export dynamics
US concerned over China, Iran helping Russia import foreign chips. G7 member states are discussing whether to sanction companies in China, Iran, and North Korea that are providing Russia with parts and technology that have military purposes, Bloomberg reported, citing its sources.
The EU and its allies are investigating a surge in exports to economies in Russia’s vicinity as they seek to prevent companies from evading western sanctions imposed on Moscow, the Financial Times reports.
David O’Sullivan, the EU’s newly appointed sanctions envoy, told the Financial Times that big increases in trade with countries in Russia’s neighbourhood raised questions as to whether products hit by sanctions were entering the country via the back door.
Armenia and Kyrgyzstan are among those with sharp increases of western imports and rises in exports to Russia, according to analysis by the European Bank for Reconstruction and Development. Turkey’s exports to Russia have also surged.
EU, US and UK exports to Russia slumped by more than half in the May to July period last year when adjusted for inflation, compared with the average in 2017-19, according to EBRD data that lays bare the impact of the sanctions.
But that drop coincides with a jump of more than 80 per cent in sales from Europe and the US to Armenia and Kyrgyzstan. Those two countries, in turn, more than doubled their exports to Russia during the same period, indicating a possible diversion of trade via new routes, the bank said.
Exports of products including vehicles, electronics, agricultural machinery and pumps from the EU to Central Asia increased, mainly driven by Kazakhstan, the bank added.
Turkey, which substituted some of Moscow’s old trading partners in the aftermath of the Ukraine war, posted a 97 per cent surge in its exports to Russia during the May to July period last year compared with 2017-19, according to the EBRD analysis.
According to data from the EU’s Eurostat database, Kazakhstan imported €1mn worth of washing machines from the EU in December 2022, four times the amount it did in the December before Russia’s full-scale invasion of Ukraine.
87 RUSSIA Country Report March 2023 www.intellinews.com