INSUBCONTINENT EXCLUSIVE:
companies through Central Asian banks, including for the purchase of goods from third countries such as China, has increased by 30%,
according to a July report by the RBC business news website.These challenges come after multiple rounds of Western sanctions targeting
an ongoing dilemma for Western policymakers: how to deprive Russia of critical military components without driving Central Asian nations
Asia are playing an important role in helping Moscow soften the blow of Western sanctions, as well as the exodus of foreign companies since
the full-scale invasion of Ukraine.Central Asian nations provide Russians with access to goods and financial services that are no longer
readily available at home
Many middle-class Russians travel to countries like Kazakhstan or Kyrgyzstan to open bank accounts or purchase Western brands.Kazakhstan, in
particular, has emerged as a hotspot for Russian entrepreneurs
to Georgia.Whether this outcome is a bug or a feature of the Western sanctions regime is up for debate
And while the crackdown against the political opposition inside Russia continues, the economic opportunities offered in countries like
Kazakhstan and Uzbekistan may contribute to brain drain and capital flight from Moscow, potentially benefiting the Western alliance.However,
Western policymakers have concerns that Russia could exploit Central Asian countries to reroute goods from the EU, further complicating
surged by 401% in 2022 compared to the previous year, before dipping slightly by 5% in 2023, according to UN Comtrade data.Similarly,
Kyrgyzstan boosted its exports of the same goods by 400% year-on-year in 2022, with a further increase of 5% in 2023
Uzbekistan saw an even larger rise, with a 430% increase in 2022 and an additional 38% in 2023.Despite these increases, Kazakhstan remains
numerous cases of how dual-use goods end up in Russia via Central Asian countries.For example, a 2024 report by the Organized Crime and
Corruption Reporting Project (OCCRP) shed light on the alleged scheme to use a Kazakh company, KBR-Technologies LLP, to order high-tech
policymakers enough to talk about it publicly
In the case of Kyrgyzstan, it helped add entire percentage points to its GDP growth, according to Alexey Eremenko, an associate director at
sanctioning Russia over its invasion of Ukraine, but they have committed not to assist Moscow in evading these restrictions.According to Tom
Keatinge, director of the Center for Financial Crime and Security Studies at the Royal United Services Institute (RUSI), since the sanctions
such as the G7 countries and their partners.In theory, Central Asian nations could align with all Western restrictions on Russia, close
their customs to Russian goods and crack down on Russian companies operating within their borders.In reality, however, implementing such
measures would be challenging
Central Asian states are keen to avoid antagonizing the West to preserve their access to the SWIFT international payments system, Western
goods and investments.Yet, maintaining close economic ties with Russia is also crucial
For instance, Uzbekistan benefits from inexpensive Russian gas imports, with prices at $160 per 1,000 cubic meters in 2023, compared to
have employed diplomatic efforts to encourage Central Asian economies to reduce their reliance on Russia, while targeting individual,
predominantly small, companies suspected of aiding Moscow.Overall, U.S
sanctions agency OFAC has added eight Kazakhstani companies, 13 from Kyrgyzstan and 12 from Uzbekistan to its Specially Designated Nationals
and Blocked Persons (SDN) list for sanctions related to Russia
Similarly, the EU has blacklisted entities involved in transferring prohibited goods to Russia.Some argue that the West should adopt a more
Belarus.Part of the reason is that Central Asian governments do not appear to be deliberately facilitating large-scale shipments of Western
Central Asian countries could have the adverse effect of pushing them closer to Russia, as they have little to lose by deepening cooperation
Times.Eremenko agrees that targeted sanctions against specific entities and individuals in Central Asia are likely
While most of the currently designated entities are small companies, often created to evade sanctions, the West could eventually target
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