Following Ukraine’s invasion in March 2022, the US and EU banned the export of banknotes to Russia. However, since then nearly 2.3 billion dollars and euros were transferred to Russia, according to customs data reviewed by Reuters.
The data, which has not been previously reported, shows that Russia has managed to circumvent sanctions that block cash imports and suggests that dollars and euros remain useful tools for trade and travel, even as Moscow seeks to reduce its dependence on hard currency.
Customs data obtained from a commercial vendor that records and aggregates information shows that cash was imported into Russia from countries such as the UAE and Turkey, which have not imposed restrictions on trade with Russia. The documents did not specify where over half the money came from.
In December, the U.S. government threatened to penalize financial institutions that help Russia circumvent sanctions, and it imposed sanctions on third-country companies in 2023 and 2024.
Dmitry Polevoy, head of investment at Astra Asset Management in Russia, says many Russians still want to have cash foreign currency for traveling abroad, as well as for small imports and domestic savings. “For individuals, the dollar is still a reliable currency,” he told Reuters in an interview.
The customs documents cover the period from March 2022 to December 2023, and Reuters was unable to access more recent data.
Just before the invasion in February 2022, the documents showed a surge in cash imports. Russia imported $18.9 billion worth of dollar and euro banknotes between November 2021 and February 2022, compared to only $17 million in the previous four months.
Daniel Pickard, head of international trade and national security at the US law firm Buchanan Ingersoll & Rooney, believes that the surge in supplies before the invasion indicates that some Russians wanted to protect themselves from possible sanctions in Western response to Putin’s decision to invade Ukraine.
Following the invasion of Ukraine, the Russian central bank quickly restricted cash foreign currency withdrawals by individuals in an effort to support the ruble.
The data shows that from February 2022 to the end of 2023, only $98 million in dollar and euro banknotes left Russia. By contrast, the inflow of foreign currency was much higher.
Earlier, a journalistic investigation, conducted by iFact, found that Georgia continues to ship drones, computer processors, GPS devices, memory cards, and other dual-use goods to Russia, despite Georgian authorities’ claims to have closed loopholes to evade Western sanctions.
The investigation found two methods for delivering sanctioned cargo from Georgia to Russia: directly or by crossing two or three state borders.
Georgia exported dual-use goods worth $10.7 million to Russia, Armenia, Azerbaijan, and Central Asian countries in 2023–2024, according to statistics.
Among other things, since last year, exports from Georgia have increased significantly in such goods as radio navigation equipment, electronic integrated circuits, digital data processing units, equipment for receiving and transmitting sound and image, and household appliances.
In recent months, the West has placed increasing emphasis on closing the loopholes that allow Russia to continue to evade sanctions.
US Deputy Treasury Secretary Wally Adeyemo said that American businesses should monitor compliance with sanctions against Russia more closely to prevent sanctioned goods from entering Russia, CNBC reported.
According to Adeyemo, American manufacturers of microelectronics, machine tools, etc. should “step up their efforts to comply with sanctions,” as should their contractors.
