FT: EU-origin dual-use items worth $1 billion ‘vanish’ in transit through Russia

Products amounting to more than $1 billion sent from the EU to Armenia, Kazakhstan, and Kyrgyzstan in 2022 have gone “missing” in transit through the Russian territory, The Financial Times reports, citing open sources.

According to these available sources, the EU’s trade with Armenia, Kazakhstan, and Kyrgyzstan “surged to unprecedented levels” after the full-scale Ukraine war broke out. At the same time, half of these dual-use items never reach their countries of destination and end up in Russia.

“These goods, which are deemed by the EU to have potential uses for military or intelligence services and are subject to export controls, may have entered Russia directly from the EU under the pretence that they were only passing through,” FT notes.

The journalists claim that Russia bypasses sanctions by putting down fake points of destination in EU customs declarations. Therefore, the Kremlin maintained access to such categories of goods as plane components, optics, and gas turbines.

“Where else could it go?” asked Erki Kodar, Estonian minister for sanctions. “Why would those countries suddenly need those goods at this time? Who needs those goods the most in the region? It’s obviously Russia.”

The FT article also notes that a disproportionately large part of this “ghost exports” to Russia departs from the Baltic States.

In February, the EU introduced the tenth package of sanctions against Moscow. The restrictions particularly targeted dual-use product transit from the EU through Russia. Dual-use items from the EU now can no longer be directly brought into Russia even if they are meant for third countries.