Time for Kazakhstan and Kyrgyzstan to block sanctions evasion schemes

When it comes to international sanctions against Russia, former Soviet republics with historical relations to Moscow, Kazakhstan, and Kyrgyzstan have been playing a geopolitical balance. Both states are trying to appease both the Putin administration and the West.

In recent months, Kazakh and Kyrgyz officials have engaged in rhetorical gymnastics in order to maintain good relations with all sides involved in the Russia-Ukraine war.

During a late-autumn visit to Germany, Kazakh President Kassym-Jomart Tokayev reiterated previous denials that Kazakhstan had helped Russian parallel-import and sanctions-evasion schemes. He claimed that Astana “has clearly stated that it will follow the sanctions regime.” At the same time, he stated that his country is not “anti-Russia” and values “comprehensive cooperation with Moscow.”

Similarly, Kyrgyz President Sadyr Japarov has dismissed US charges that his country violated sanctions. “There is no reason to believe so. Russia and China do not depend on a small  Kyrgyzstan,” he was quoted as saying.

The rising evidence of improper trade practices in sanctions evasion undermines such leaders’ assertions. The high growth of trade volume with Russia in 2022 is a potential indicator of sanctions evasion schemes. Kazakhstan’s exports to Russia climbed by 25% the year Moscow started the war in Ukraine, while Kyrgyzstan’s exports increased by 150% over the previous year’s totals, Eurasia.net reported.

There have been numerous reports of suspicious trading between Central Asian countries and Russian companies. The Washington Post detailed a foiled operation in which a Kyrgyz corporation attempted to act as a conduit for transferring Chinese-made drones to Russia.

In another case, a Radio Azattyk investigation revealed how Kyrgyz and Kazakh enterprises transport microchips, telecommunications equipment, and other technical components to Russia. These parts are comparable to those found in Russian weapons used in Ukraine.

An OCCRP investigation revealed that Kazakh enterprises are shipping drones and microchips reportedly utilized by the Russian military to Russia.

Even Kazakhstani officials admit that some banned dual-use items have found their way to Russia via Kazakhstan.

On a fundamental level, in the long run, it appears difficult for the Central Asian countries, if not impossible, to keep both the West and the Kremlin happy. The concepts are mutually contradictory. Kazakhstan cannot simultaneously enforce the sanctions regime and be on good terms with Russia.

It’s practically impossible since the West is struggling to help Ukraine push Russian troops back from the occupied territories, and Russia tries to conquer more areas in Ukraine or impose its terms for talks. In this context, fueling Russian weapons production clearly plays on one side of the conflict.

The Western states have only sanctioned Kyrgyzstan, despite ample proof that both Kazakhstan and Kyrgyzstan are violating Russia’s sanctions regime. The West has sanctioned five Kyrgyz businesses for assisting Russia in its military effort.

One possible explanation for the disparity is image manipulation. Kazakhstan has implemented steps that appear to be effective, even if they are not. For example, in order to better manage the flow of sanctioned items, Astana established an automated online tracking system that reportedly allows the surveillance of imported goods into Kazakhstan and their subsequent movements. Astana proposed this as a method to halt the flow of sanctioned items via sanctions evasion schemes in the country.

However, Kazakh investigative journalists have expressed concerns about the system’s effectiveness. Enterprises that can avoid the surveillance system export the materials used in Russia’s military industry, according to Dimash Alzhanov, a political analyst from Kazakhstan.

Whether or not they are effective, Kazakh officials have done more than their Kyrgyz counterparts to answer Western demands for halting sanctions evasion schemes. For example, the Kyrgyz security services’ alleged investigation into the sanctions schemes over the past six months has produced no results.

Global economic considerations also help Kazakhstan reduce Western anger over sanctions circumvention schemes. Kazakhstan’s oil and gas resources attract substantial investment; six of the ten major investors in the sector are based in the EU, the United Kingdom, or the United States. Meanwhile, Kyrgyzstan lacks natural resources and is not a cross-continental commercial hub.

The practice of gateways for sanctions evasion for Russia must be stopped, and the Central Asian enterprises implicated in assisting Russia in circumventing sanctions and fueling Russia’s war must be punished because they assist the Kremlin troops in strengthening their military capabilities, resulting in more Ukrainians being murdered by Russian strikes.

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