Armenia as a Key Supplier of Sanctioned Goods to Russia: WSJ

Several former Soviet republics have become major transit hubs for computer chips, lasers, and various civil and military goods supplied to Russia, as reported by The Wall Street Journal.

The export of so-called dual-use goods from the U.S. and the EU to Armenia, Georgia, Kyrgyzstan, Uzbekistan, and Kazakhstan rose to $24.3 billion in 2022, up from $14.6 billion in 2021, according to the publication.

“These countries overall increased their exports to Russia by almost 50% in 2022, reaching about $15 billion,” the newspaper states.

According to WSJ, Moscow continues to acquire Western goods that are largely restricted by U.S. and European sanctions.

“The trade routes through former Soviet republics are a sign of Russia's success in finding new ways to circumvent Western sanctions,” the publication cites European officials.

The periodical noted that analysts from the European Bank for Reconstruction and Development (EBRD) have termed this route as the “Eurasian detour.” WSJ referenced UN data indicating that in 2022, the U.S. and the EU exported integrated circuits worth more than $8.5 million to Armenia, which is 16 times the export volume of 2021.

“At the same time, exports from Armenia to Russia increased from less than $2,000 in 2021 to $13 million,” the publication claims.

According to the newspaper, a representative of the Armenian government stated that the country “has not participated in any processes or actions aimed at circumventing EU or U.S. sanctions.” The Armenian government responded by stating that “the Republic has strengthened control over goods under sanctions, and authorities have discussed this issue with the United States.” A similar situation has arisen with the supply of lasers to Kyrgyzstan and measuring devices to Uzbekistan, the paper notes. Both countries have increased their exports to Russia.

As part of the 11th package of sanctions against Russia, the EU has proposed sanctions regimes prohibiting the export of certain goods to countries or companies that allegedly assist Russia in circumventing Western restrictions. “It is very questionable that the export of dual-use goods to Central Asia and the Caucasus suddenly increases after the tightening of sanctions,” remarked EBRD Chief Economist Beata Jaworski.

Earlier, Bloomberg reported, citing documents from the European Commission, that Armenian companies were included in a new package of EU sanctions. The sanctions will concern more than 35 companies from Armenia, Iran, China, the United Arab Emirates, and Uzbekistan, the agency notes. Bloomberg did not publish their names. According to the agency, the EU has suspected Armenian companies of supporting Russia’s military-industrial complex by circumventing Western sanctions.

Additionally, the Bild publication published an investigation into the export of goods from the German industry to Russia through the CIS countries, bypassing Western sanctions. According to Germany's Federal Statistical Office, exports from Germany to Armenia, Kazakhstan, and Georgia have doubled within a year. German authorities, according to Bild, have suspected that German goods are exported to EAEU countries and then imported to Russia, circumventing Western sanctions.

Western senior officials in tax and trade sectors have also noted an increase in the supply of military technologies to Russia via Armenia and Kazakhstan for the purpose of circumventing sanctions.

The New York Times, citing a document from the Bureau of Industry and Security (BIS) of the U.S., reported in April that in 2022, Armenia imported 515% more chips and processors from the U.S. and 212% more from the EU than in 2021. “Subsequently, Armenia re-exported 97% of that same product to Russia,” the newspaper added.

Armenian Prime Minister Nikol Pashinyan stated during a joint press conference with German Chancellor Olaf Scholz in Berlin on March 2 that Armenia is not helping Russia to circumvent Western restrictions, and the rhetoric surrounding such a situation is “just talk.”

“As a democratic country, for which transparency is extremely important, we are also transparent on this issue. Speaking about Armenia helping Russia evade international sanctions is just talk,” he stated.