How Kazakhstan Helped Russia Circumvent Sanctions

Investigative journalists from Molfar looked into how Russia circumvents sanctions with the help of Kazakhstan.

On September 20, 2022, Kommersant reported that Kazakhstan was intercepting Russian trucks with goods from the EU. From June 1, 2022 to January 1, 2023, Kazakhstan temporarily suspended the ban on attaching containers to Russian and Belarusian trucks. The Government of Kazakhstan took such a step in response to the similar lifting of the ban on auto-coupling in Russia.

Molfar’s sources reported that Russian transport workers mainly imported household appliances, smartphones and other electronics through the Republic of Kazakhstan.

How it worked:

• Payment for goods in Europe was made through a Kazakhstani legal entity
• Payment for goods with shipment from a European warehouse to the border with Belarus
• After crossing the border, the cargo was hooked on Russian or Belarusian trucks
• The goods later go to Kazakhstan and end up in Russia.

This is possible because Kazakhstan is a member of the Eurasian Economic Union (EAEU). While being imported into Kazakhstan, goods can freely move through the territory of the Union if the duty has been paid at the rates of the unified tariff of the EAEU.

Increased Supplies from Kazakhstan to Russia

In May 2022, Samsung phones designated for the Kazakhstan market appeared in Russian network markets. The Samsung TV factory in Kaluga also partially resumed operations in June. But the TVs will be exported only to Kazakhstan, Kyrgyzstan, Uzbekistan and other countries.

In July, MacBooks imported from Kazakhstan by parallel import appeared in the networks of stores "M.Video", re:Store, Wildberries and Svyaznoy. 

The journalists investigated the growth of certain groups of goods that Russia imports through Kazakhstan.

The authors also claim that Russians also import specific equipment through Kazakhstan, which will be used exclusively for the needs of the defence industry.

The export of electronic integrated circuits has increased 45 times: from 100 thousand to 4.5 million dollars.

Russia is an important trading partner of Kazakhstan. In his article for The National Interest, the President of Kazakhstan, Qasym-Jomart Toqayev, wrote that Kazakhstan and Russia maintain special relations of bilateral cooperation. At the same time, Kazakhstan recognizes the territorial integrity of Ukraine.

The authors assume that the Government of Kazakhstan will not engage in further confrontation with the Government of the Russian Federation. And, after a while, Astana will abandon their principles for the sake of preserving Kazakhstan’s welfare.

Sanctions

Sanctions against individual legal entities could disrupt these schemes. The Molfar team investigated Kazakhstani legal entities through which Russia imported the largest number of goods into its territory.

However, the imposition of sanctions against individual legal entities is only a temporary solution. There is nothing stopping Russia from opening new legal entities in Kazakhstan and continuing the parallel import of sanctioned goods.

To find out who owns the companies shown in the last chart, follow this link.

Large Kazakhstani retail chains like Sulpak and Technodom are there. The graph shows how in 2022 these companies have sharply increased exports of foreign electronics from Kazakhstan to Russia. IP "Arsen", engaged in the supply of used spare parts from Europe, also burst into the market and ended up in the company of major market players.

Orignal Author: Ilya Astakhov

DISCLAIMER: This is a translation. The text has been modified, the content is the same. Please refer to the original article for accuracy.