young companies suddenly sent a lot of goods to Kazakhstan or Kyrgyzstan

The sanctions against Russia seem to be being circumvented mainly by newly established companies. But some Dutch multinationals also suddenly sent a striking number of goods to countries in the region such as Kazakhstan, Turkey and Kyrgyzstan in the past two years. This is evident from research by the Central Bureau of Statistics (CBS) and the University of Groningen.

The investigators investigated the suspected transit trade through countries near Russia. Two years ago, the Autovantra also delved into the trade figures. It then turned out that immediately after the imposition of the sanctions in February 2022, exports from the Netherlands to Russia plummeted. Countries such as Kyrgyzstan, Armenia, Kazakhstan and Turkey started to import a significant amount from the Netherlands and subsequently also exported a lot to Russia.

This is an indication that entrepreneurs use those countries as a way station to get goods to Russia.

The fact that entrepreneurs use the countries in the Russian region as a smokescreen is also evident from recent criminal cases. In October, for example, another Russian became Dutch convicted. The entrepreneur has been exporting electronics to Russia for some time. But due to the sanctions, this was no longer allowed. Instead of stopping his trade, he looked for a detour.

He started selling his goods to companies in Kazakhstan, Kyrgyzstan and Uzbekistan. Those companies were subsidiaries of a Russian customer. In addition, the entrepreneur falsified documents using Photoshop to suggest that the items would remain in Uzbekistan and Kyrgyzstan.

The judge ruled that the man was circumventing the sanctions and imposed a prison sentence and community service.

The figures from Statistics Netherlands and the University of Groningen now confirm once again that the ‘bypassed countries’ had to store significantly more goods flows from the Netherlands after the invasion of Ukraine. Not only in 2022, but also in 2023. In fact, trade in goods that are not allowed to go to Russia only increased further.

The value of trade in Armenia, Kazakhstan, Kyrgyzstan, Mongolia and Turkmenistan was about 74 percent higher in 2022 compared to the three years before the sanctions. In 2023, this was even 90 percent higher than in previous years.

What is new is that the researchers also looked at who sends the items. Before the invasion of Ukraine, it was mainly multinationals that exported goods from the Netherlands to Russia. The sanctions largely restricted that export. Many multinationals then looked for their customers elsewhere.

Part of the demand came from neighboring countries of Russia, with the risk that goods from multinationals were transited from there and still ended up in Russia. About 540 Dutch multinationals took that risk. This can be conscious or unconscious.

Another group of companies is more striking: companies that have never exported certain items before. A large group of these types of companies suddenly started doing this after the Russian invasion of Ukraine. And those things mainly went to countries like Kazakhstan, Kyrgyzstan or Mongolia. The researchers found more than 800 of these entrants to the market who apparently saw an opportunity.

The researchers believe that these relatively often involve young, small companies that export little and mainly act as middlemen for the export of sanctioned goods.

Want to know more? Then watch this video from Nieuwsuur about parts from shipbuilder Damen that ended up in Russia: