Page 9 - bne_August 2023_20230802

bne August 2023 Companies & Markets I 9
US Treasury starts spying on Russia’s neighbours for sanctions compliance
Jason Corcoran in Dublin
Representatives from the US Department of Treasury have been assigned to roles in Kazakhstan, Uzbekistan, Armenia and Tajikistan to monitor each country's compliance with sanctions against Russia, bne IntelliNews can reveal.
Treasury officials operate out of the US Embassy in each of these countries and have been tasked with monitoring transactions made by Russian entities with local lenders that seek to circumvent sanctions, according to a senior banker in Almaty.
“The Americans are really trying to clamp down on the worst offenders for shadow payment schemes and close any loopholes for parallel imports,” the banker, who declined
to be named for security reason, told bne IntelliNews. “But I would say Russia will be fuming that these guys are on the ground in their backyard going through the books.”
Only Georgia, a country which has recently improved
its political and trade ties with Moscow, has baulked at
the request by US President Joe Biden’s administration. Meanwhile, the EU is also on manoeuvres to shut down hubs in the Caucasus and Central Asia which have become vital routes for indirect trade to Russia.
The US Department of Treasury did not immediately reply to a request seeking comment.
“This year will be a year of sanctions enforcement,” Maria Shagina, a sanctions expert at the International Institute for Strategic Studies in Berlin, told bne IntelliNews. “The EU’s enforcement is in dire need of reinforcement, though, as national governments’ capacities vary across member states. Levelling the playing field, establishing better cross- border co-ordination and harmonising the legislation are key for the EU efforts to prevent sanctions circumvention.”
Financial sources in Kazakhstan said top lenders in the former Soviet states will now have a chosen employee responsible for complying with Western sanctions while the Central Bank of each country will have a monitoring centre to scrutinise all transactions.
In a separate development, banks in Kazakhstan, Armenia and Hong Kong have begun blocking payments for electronics made by buyers in Russia for much-coveted iPhones, tablets and washing machines.
A report by Russian newspaper Kommersant last month
suggested some foreign lenders are refusing payments from Russian clients seeking to buy everything from servers and smartphones to microcircuits and air fryers. The crackdown on so-called parallel imports could lead to prices surging by up to 50% for some goods.
Lenders are responding to the introduction of the tenth package of US sanctions that threaten them for co-operating with Russian entities. The restrictions apply, amongst other things, to the provision of funds, goods or services in favour or from a prohibited person or entity.
“The Americans are really trying to clamp down on the worst offenders for shadow payment schemes and close any loopholes for parallel imports”
The EU is currently trying to shut down hubs in the Caucasus and Central Asia which have become vital routes for indirect trade with Russia. Kazakhstan has recorded a 57% rise in trade with Russia since the war began, while Armenia has seen trade jump by 22% in dollar terms, according to customs records.
Furthermore, a report by the German newspaper Bild in May indicated that the exports of certain goods from Germany to the CIS states have doubled since Russia’s invasion of Ukraine.
The supply of German goods to Tajikistan increased by 150% in 2022, to Belarus by 77% and to Kyrgyzstan, by a staggering
www.bne.eu