Just in the last six months, Russia imported banned chips from Western companies worth more than $502 million, which are used for the production of rockets and other types of weapons. Machines for the defense industry were also imported, amounting to at least $171 million, along with Western spare parts for civil aviation worth $389 million, and iPhones. Verstka (a media outlet) examined closed data from Russian customs statistics, calculated the amount of sanctioned goods entering Russia, and interviewed logistics experts, forwarders, and businessmen who explained how illegal supply schemes work.
Having initiated the war in Ukraine, Russia faced a barrage of sanctions from the US and EU. Immediately after the war, it seemed that the Russian industry, including the military, and businesses would be left without critically important imported technologies. European and American goods were expected to vanish from store shelves. However, this did not happen.
Following the outbreak of the war, Russia closed a significant portion of its statistics, including ceasing to publish data on foreign trade. Using closed data from Russian customs statistics, Verstka (a media outlet) managed to calculate the volume of sanctioned goods since the beginning of 2023. Unlike the typically used customs services for such research (e.g., Import Genius), these data allowed for real-time and larger-scale assessment of imports into Russia. They analyzed categories of prohibited goods, covering both the defense industry and the civil sector, such as aviation and smartphones. The period considered for analysis was from January 1 to July 1, 2023.
According to Castellum.AI’s calculations, since February 24, 2022, there have been more than 13,500 restrictions and prohibitions against Russian citizens, companies, and various sectors of its economy. Taking into account sanctions related to the death of Sergei Magnitsky and the annexation of Crimea, the total number of restrictions surpassed 16,000. In terms of the number of sanctions, Russia holds the world record, surpassing Iran by more than three times.
An investigation revealed that practically anything can be imported into Russia from any part of the world, ranging from dual-use chips to turbojet engines for Airbus. Western companies are involved in schemes through third countries, allowing Russian authorities to effectively bypass European and American sanctions.
Where does Russia get its new missiles and modern weapons?
Dual-use goods were the first to be subjected to sanctions. The Russian defense industry critically depends on foreign microchips and microprocessors. For instance, in the Kh-101 cruise strategic missile produced by MKB Raduga, a part of the Tactical Missiles Corporation, which is one of the most advanced missiles in service in Russia, there are components such as Intel processors, Xilinx and Texas Instruments chips, and an Analog Devices Inc. transceiver.
All these components continue to enter Russia without hindrance up to the current moment. Over the past six months, the Russian authorities have cleared shipments of components from American companies: Analog Devices Inc. valued at more than $98 million, Xilinx at over $75 million, Microchip Technology at over $42 million, Texas Instruments at not less than $38 million, and also Infineon, Germany’s largest semiconductor manufacturer, at over $28 million, according to customs data. Furthermore, Russia imported products from Marvell (a chip manufacturer) worth more than $11 million, Cypress Semiconductor worth over $3.8 million, and Atmel worth more than $2.7 million.
Moreover, Russia imported products from American companies Intel and AMD, including microprocessors, valued at over $169 million and $35 million, respectively. Almost all Western electronics are sent to Russia through China and Hong Kong. For instance, the top 3 largest senders of Intel components are Hong Kong-based companies: Time Art International Limited (sent nearly $40 million), Union Tech Inc. Limited (sent over $17 million), and Dexp International Limited (sent nearly $15 million).
Hundreds of companies transport dual-use chips to Russia. Verstka compiled a list of the largest importers of these components. Among the top 25 importers, as we could determine, 11 are direct suppliers to military-industrial enterprises, including the top five largest importers.
Against two companies from the top five importers sanctions were imposed by the US. These companies are Analog Devices Inc. importers — VMK and Testkomplekt — which are suppliers to Rostec enterprises. The sanctions imposed in January did not hinder their operations. Since the beginning of the year, they imported components worth nearly $20 million. VMK and Testkomplekt receive goods through Chinese and Hong Kong firms. For example, the main partner of VMK is the Hong Kong-based Tordan Industry Limited. In June, the EU also imposed sanctions against the company. VMK is also the largest importer of Xilinx chips. The company imported electronics from this American company worth over $10 million.
These are not the only importers of key electronic components. Among other major importers of Analog Devices Inc. is the company Kvazar. Since the beginning of the year, it imported Analog Devices Inc. components worth $3.3 million. Kvazar has several suppliers — mainly in China and Hong Kong. The largest shipment — over $870 thousand was sent in January by the Hong Kong-based LL electronic limited. The shipment was paid in dollars and came from Thailand. However, the company also had partners in Europe. For example, from January to May, the Estonian company Elmec Trade OU sent prohibited electronics to Russia, amounting to at least $250 thousand. Both Kvazar and Elmec Trade OU were included in the US sanctions lists in May of this year. However, the Russian company continued to freely transport components through China. In June, the same LL electronic limited sent Analog Devices Inc. components worth $200 thousand directly from China to its partner in Russia.
Another company among the top ten importers of Analog Devices Inc., Texas Instruments, and Xilinx is IQ Components. It imported components from only these three companies worth more than $13.8 million. All shipments were made through China and Hong Kong. The phone number listed on its website coincides with the phone number of another company, Inkotech, which, in turn, does not hide its connections with the Russian defense industry and is involved in the production of components, including those used in military radar systems. Its co-founder, Pavel Grishanovich, has been under US sanctions since 2012.
Xilinx chips are not only used in rockets. For instance, the company SMT-Aylogic, which is part of the supplier network for the production of UAVs Orlan, imported Xilinx chips worth nearly $1.6 million since the beginning of the year. Among the senders were two Chinese companies and the Turkish company Margiana Inşaat Diş Ticaret Li̇mi̇ted Şi̇rketi̇.
Part of the Rostec holding, AO Radiozavod, produces control units for anti-aircraft missile batteries Ranjir-M1. Among its suppliers was TD Symmetron EK. It is one of the largest importers of German Infineon chips into Russia. Since the beginning of the year, it has imported these components worth $2 million. The company is directly connected to the Russian defense industry and is part of the electro-technical holding Symmetrion. However, in June-May 2023, it changed ownership. The organization came under sanctions when one of its co-owners was Igor Sukhanov. He is a graduate of the Voyenmekh (Military Mechanical Institute) in St. Petersburg and began his career at the Severniy Press plant, as recalled by one of his colleagues. At Severniy Press, they were debugging the first prototypes of the guidance head for the Oniks missile.
In total, since the beginning of 2023, chips from Western companies worth more than $502 million have been imported into Russia, according to Verstka.
But chips are not the only type of prohibited products crucially needed by the Russian defense industry. Sanctions apply to hundreds of essential positions in the Russian defense industry, including machine tools. For example, the company Unimatik has unimpededly imported Italian O.M.V. and German Arinstein machine tools into Russia since the beginning of this year, with a value of at least $5 million. In some cases, the sender was the manufacturer itself. For instance, in May, Unimatik brought milling machines from Italy, sent directly by O.M.V. Officine, despite this particular type of product being under export control by the European Union. One of the main state customers of Unimatik is Plant No. 9, a leading tank gun manufacturer in Russia. As for the German Arinstein machine tools, they were sent by Hong Kong-based Arclm International Trading Co., Limited, from China.
Even simpler weapon parts are being imported. For example, LLC Pointer imported 52.4 thousand optical sights from China, the USA, and Japan, worth $9 million in 2023. The company collaborates with Russian law enforcement agencies, having supplied weapon consumables to the Federal Security Service in 2021. Another importer, SitiImpeks, brought in 150 Chinese thermal imagers for $1 million.
The largest shipment of thermal imaging sights was carried out by LLC ART-ELV — 15,728 units worth $13.5 million, with unit costs ranging from 40,000 to 740,000 rubles. This wholesale company imports Chinese thermal imagers from Yantai Iray into Russia.
Why airplanes in Russia continue to fly reliably
Civil aviation in Russia has been one of the hardest-hit industries by sanctions. Russian airlines have lost access to international routes, leasing and technical maintenance options, new foreign aircraft, and insurance tools. Towards the end of the previous year, the International Civil Aviation Organization (ICAO), a UN agency, flagged Russia with a “red flag” due to potential flight safety issues. Apart from Russia, only Bhutan, Liberia, and the Congo have received such a designation.
See also: How the West loses to Russia in energy sanctions
However, it seems that Russian airlines have managed to solve their most critical problem — the shortage of spare parts. Parallel imports, as indicated by customs data, allow them to import any necessary components.
According to Verstka’s calculations, the four largest airlines in Russia — Aeroflot, S7, Pobeda, and Rossiya — have imported aircraft parts worth $47 million, $35 million, $13 million, and $15 million, respectively, since the beginning of this year. Almost all of these components are from Western manufacturers. For example, Aeroflot brought in parts from American companies Honeywell worth $7.5 million, Woodward worth $4.5 million, and Boeing worth $2.5 million, as well as from the French company Safran Nacelles worth $4.5 million.
S7’s subsidiary Globus imported a complete turbofan engine in March this year, used for the Airbus A319/A320/A321 family of aircraft. Such engines are produced by the Franco-American consortium CFM International, and the cost of one engine is around $7.5 million. It was sent by Chinese company DLA (GZ) Technology Co., Ltd. On the company’s website, it is stated that they are involved in the “repair” and “supply” of aircraft and spare parts, and they are also a “leader in the field of disposal and recovery of decommissioned aircraft in China.” However, half of the sections on the website are missing. In the same month, S7 imported an engine for the passenger Embraer E170, manufactured by the American company General Electric. It costs about $4.4 million. This time, the engine was sent by a company called Desert Sun Supply, registered in the UAE.
In January of this year, Pobeda airlines imported two batches of non-military radar equipment produced by Honeywell, totaling over $580,000. The sender on both occasions was the Armenian company A Trade Service, and the goods arrived from the UAE. In total, Pobeda imported Honeywell spare parts worth over $3.5 million and Rockwell Collins Inc. and Boeing spare parts worth over $2 million since the beginning of this year.
The airline Rossiya imported Honeywell spare parts worth over $6 million. For instance, in February, the company received a batch of pressure measurement devices worth over $1.2 million, sent by the Chinese company Yunnan Rongjin Agriculture China Products.
Not all airlines directly place orders for spare parts. Sometimes, other companies do it for them. For example, with the introduction of sanctions, the business of a small company called Protector has seen a sharp upturn. Its revenue increased by 1000% in 2022. Since 2023, it has imported aviation spare parts worth at least $61 million, including six aircraft engines for Boeing 767, Boeing 737, and Airbus A320, with prices ranging from $1.9 million to $10 million. The manufacturers are CFM and General Electric. The engines were sent by two Emirati companies, Desert Sun Supply (also supplying parts for S7), and Jam Jum Supply. Additionally, Protector imported two helicopter engines for the French AS 350 Ecureuil helicopter, sent by the Thai company KHWA Wang Parts. The manufacturer is the French company Turbomeca.
Why iPhones are abundant in Russia and have hardly risen in price
As for iPhones in Russia, they remain abundant and have hardly increased in price. In 2021, more than 30 million smartphones were imported to Russia. After the war began, both Apple and Samsung announced the cessation of deliveries to Russia. At that time, these two companies accounted for more than 40% of the entire smartphone market in the country. In the first half of the last year, smartphone imports to Russia dropped by 38%. By the end of the year, it had partially recovered, but the Russian smartphone market still decreased by 19% compared to the pre-war year 2021.
However, the market share of Apple and Samsung changed only slightly. By the end of last year, every fifth smartphone sold in Russia was manufactured by Samsung, and every tenth one was still from Apple. Despite this, smartphone prices increased by only 3%.
For a long time after the war began, the import of iPhones into Russia was completely legal. However, on February 25 of this year, the US finally banned the export of smartphones priced over $300 to Russia. Using customs data, Verstka calculated that since February 25 alone, iPhones worth more than $389 million were imported to Russia. Most of them were ordered from the UAE. It’s worth noting that this figure only accounts for officially declared shipments cleared through customs. Some smartphones are imported into Russia through informal channels (read below).
Long before the imposition of sanctions in Russia, there was a thriving parallel import. This is when goods are imported and cleared through customs in Russia under the guise of another product or at a lower value. In the Moscow shopping center Gorbushka, electronics were always sold at some of the lowest prices in Russia precisely because the products sold there were imported through gray market.
This business has been operating since the 90s and continues to do so today. Here’s how it works: 100-150 devices, such as Apple products, are purchased through an intermediary company registered in a country where these devices are available at the lowest prices, such as the USA or Thailand. There are several ways to import goods into the parallel market in Russia. Firstly, to reduce taxes, the value of the shipment can be artificially lowered in agreement with customs, making it seem like the iPhone was purchased not for $1000 but for $100. The second method is to declare the goods under a cheaper category. Instead of declaring them as smartphones, they can be declared as something else, similar to smartphones. It is also possible to clear iPhones “as bricks,” but only to some extent because “there should be some logic observed,” as mentioned by a former customs employee.
When it comes to small-sized electronics, the old and familiar scheme with shuttle traders is still relevant. As an ordinary tourist, the shuttle trader flies to the UAE (where there are no stringent tax rules that make Apple products expensive) and purchases 4-5 smartphones with a total value not exceeding $10,000 to avoid declaring the goods at the Russian customs. Then, tax-free processing is carried out, and the smartphones are brought to Russia in regular luggage, as reported by the owner of one of the trading points in Gorbushka to Verstka media outlet.
In addition, other electronics continue to enter Russia without obstacles. For example, Dell products. Before the war, the American company was the main supplier of server equipment to Russia. However, the company left Russia in August of the previous year. Since the beginning of 2023, Dell equipment worth more than $88 million has been imported into the country. The servers and their components were sent by Chinese, Hong Kong, Indian, Turkish, Thai, and Emirati companies.
How sanctioned imports work
In its simplest form, almost any scheme for supplying sanctioned goods to Russia looks as follows. A company is registered in a third country, as several individuals engaged in parallel import explained to Verstka. This company either purchases the required goods on the domestic market or directly orders them from the manufacturer and puts them up for re-export to Russia. Such companies are registered by both Russians and foreigners, but having a foreign founder is considered more reliable because some suppliers keep track of this.
See also: Russia managed to increase missile production several times despite Western sanctions
Entrepreneurs involved in re-export prefer to register intermediary companies in neutral countries with large economies and active international trade, such as China or Turkey. The choice of countries is based on the type and quantity of goods they plan to bring in. For electronics, China and Hong Kong are most commonly used.
For some deliveries, the UAE and countries of the former Soviet Union are actively utilized, including Kazakhstan, Kyrgyzstan, Armenia, and Uzbekistan. Each country has its own peculiarities, as claimed by the businessmen Verstka spoke to. For example, in the case of Armenia, if the shipment is large and it is not feasible to transport it by air, it is sent overland to Iran. From there, it is transported by ships across the Caspian Sea to the port of Astrakhan. Such a complex route arises because Armenia does not share a land border with Russia. In Georgia, there may be issues with the transit of sanctioned goods, according to Armen, a logistics expert at Right-flow.
Some goods make their way to Russia through small businesses in small batches.
“Bringing some reagents or equipment is easy. Difficulties arise with large shipments. When, for example, goods are transported by containers, that’s when China and Turkey come into play. The routes that were previously used to import small volumes of goods are now used for the entire import to Russia,” Armen explains the essence of how parallel import works.
After the start of the war, imports into Russia declined, reaching its minimum in April 2022. However, by September, it had returned to pre-war levels due to the replacement of importing countries. By October 2022, imports from Western countries — Europe and the USA had decreased by 50% and 80% respectively, according to analysts at Silverado. The vacated space left by Europeans and Americans was filled by China, Turkey, and CIS countries. Trade with these countries significantly increased. For example, Armenia’s exports to Russia grew by 187% in 2022, reaching $2.37 billion. Kazakhstan’s exports to Russia increased by 25% in the past year, reaching $8.78 billion. Kyrgyzstan’s exports grew by 250% and exceeded $960 million. This is partly because these countries serve as transit points for sanctioned goods.
Currently, it is still possible to import anything into Russia, according to businessman Sergey. He imports various sanctioned goods into Russia, including car parts. There are always multiple route options, he says, through China, Turkey, and former Soviet countries. Likewise, there are multiple payment options available.
Payment method is an important element of any parallel import scheme, say importers interviewed by Verstka. One of the simplest and effective ways to pay for a relatively small purchase, up to several million dollars, is through offsetting. There is an organization with legal entities in Russia and several other countries. The client transfers rubles in Russia, and the foreign company, registered in China, UAE, or even Kyrgyzstan, makes the purchase on behalf of the client.
“For example, we have a shipment in progress that needs to be paid in the Netherlands. Everything is paid through Hong Kong. I have friends who have a company with offices and warehouses in both Hong Kong and here. I simply give them the money in Moscow, and they pay for everything through the Hong Kong company,” Sergey gives an example.
According to Sergey, his shipment will then be brought into Russia through Tajikistan.
Such “mediation” is also a business. Russian companies do not have the opportunity to register their own legal entity abroad. Therefore, they turn to others who can provide this service for a percentage. The cost ranges from 1.5% to 5%, according to several people who earn from assisting with payment for supplies from abroad.
More classical payment methods are used — such as interbank transfers. In the case of China, Russian import companies sometimes don’t even need an intermediary. They can order goods directly from the factory and transfer money in yuan via SWIFT based on an invoice, as told by one of the importers working with China. However, if they need to order something from Europe or the USA through China, they will require a Chinese company to act as an intermediary. This Chinese company will place the order and then re-export the goods.
It is essential for this company to have a Chinese beneficiary, as the importer explains: “European companies, if you inform them in advance that the beneficiary is a Russian, they immediately refuse.” Often, such a company is set up in Hong Kong because money can be sent from Hong Kong to any point in the world within 24 hours.”
It is important to note that not all Chinese banks accept transfers from Russia. For example, a large bank like ABC (Agricultural Bank of China) will not engage in such transactions as it is international and has branches in the USA and the UK, so it doesn’t need any complications. On the other hand, smaller banks, “not well-known ones, like, say, Guangdong Bank — it will gladly accept Russian money”.
Parallel import schemes work both ways. In the same manner, prohibited Russian goods find their way into Europe. For example, petroleum products. After the start of the war, Russia increased its exports of petroleum products to African countries by more than ten times, as stated in a recent S&P Global review. These countries, in turn, re-export them to Europe.
The Chinese trade route
China is a key hub for Russia to obtain sanctioned goods. Supplies from China overall provide a vast array of various necessities for Russia, not just military ones. This includes re-exporting sanctioned goods from the US and Europe. The example of China illustrates how this is organized.
A Chinese company orders tractors from the USA — for either their own use or for further shipment to a hypothetical India, as described by one of the interviewees from Verstka, who works with China. The goods arrive at Shekou and Guangzhou ports. According to the interviewee, these ports are known for being places where “you can always negotiate.” When the ship arrives at the port, the Chinese company suddenly decides that it has found another buyer not — India or it may even refuse the cargo in favor of another buyer. Immediately, these tractors are “transferred to other containers at the port, and they are re-exported to Vladivostok or Sakhalin, and from there, they go by rail.” As long as the goods have not crossed the duty-free zone, meaning they have not crossed the border or left the port, everything can be resolved right on the spot. If they leave the zone, then it becomes much more complicated.
“And the foreign shipper from somewhere like Denver, who was sending tractors to a Chinese buyer, fulfilled the contract’s conditions. He sees that the Chinese company actually paid for everything, and the shipowner sees that the cargo entered the port’s territory and was unloaded there. But after that, it becomes difficult to trace the ends. Because, for instance, the Evergreen containers (in which the tractors were transported) went through different routes, while the Chinese containers (in which the tractors were transferred) headed to the Russian Far East, to Sakhalin,” says the interviewee from Verstka.
See also: 500,000 euros for avoiding sanctions. How law firms in Europe help Russians
According to him, currently, Russian Far Eastern ports are so heavily loaded with Chinese ships that they resemble inland Chinese ports more than international ones.
“Even if you mention Vladivostok to a Chinese person now, he pretends not to understand, but then he says, ‘Ah, Haishenwai!’ [the region’s name during China’s control until the mid-19th century — ed.]. Two years ago, it wasn’t like this, but now they even correct you,” the interviewee states.
As an example of how re-export can be controlled, the businessman cites Japan.
“There is the strictest control. They double-check the cargo’s destination and the buyer ten times. They even send their emissaries to the factories later on: ‘We sent you 10 boxes of a certain type of goods’ — they will come and verify if they really arrived at your factory and if they are actually installed. These are the Japanese, they are perfectionists. But when it comes to business between America and China, the goods go back and forth, and nobody bothers.”
Russia actively imports directly from China. Russian military volunteers and funds work directly with the country, collecting aid for the Russian group in Ukraine.
Entrepreneur Roman Alyokhin from Kursk explains that since the beginning of the war, numerous companies have emerged in Russia that import goods for the Russian military from abroad. These companies then resell the products to volunteer organizations, which, in turn, deliver the goods to the front lines. Alyokhin is one of these volunteers. According to him, these import activities are carried out by “patriotic firms,” and many of them import goods without any markup.
“None of the major volunteer groups now purchase goods from retail traders or through Avito, as it was at the beginning of the operation,” claims Roman.
Goods are imported from China, for example, drones, anti-drone guns, radios, various spare parts, medical supplies, anesthesia equipment, and much more, as listed by Alyokhin. According to him, buying goods from China while in Russia is now not much more challenging than purchasing something in Novosibirsk while being in Kursk.
“In China, there is a large group of agents, Russian people in every province of China. You call them, tell them what you need, and they get it for you,” Alyokhin explains.
Verstka had a conversation with one of the entrepreneurs who transports goods from China for the needs of the war in Ukraine. Even before the start of the hostilities, interviewee, along with a Chinese citizen, registered a legal entity there, primarily engaged in construction. However, in the last few months, the company has been operating not only in construction but also occasionally procuring Chinese DJI drones for the Russian army. DJI drones come in different types: there are consumer-grade ones and professional ones that allow long-range or even night-time filming. They are used in various ways, such as artillery targeting, fire correction, reconnaissance, and even for deploying munitions. Most of the bird’s-eye view videos you have seen from the war in Ukraine are likely shot using DJI drones.
The drone manufacturer, the Chinese SZ DJI Technology Co., Ltd., declared last year in April that it would not supply its products to Russia. However, according to several of interviewees, they freely sell them to Chinese companies with Russian citizens as co-founders. Moreover, one can get a good discount by ordering multiple batches. The most budget-friendly drone suitable for reconnaissance, the DJI Mavic 3, brought directly from China, costs around 200,000 rubles, as mentioned by Verstka interviewees. This is almost half the price compared to the official DJI retailer in Russia, where the Mavic 3 is priced at nearly 345,000 rubles.
In China, you can buy not only drones but also other military equipment. For instance, Verstka’s interviewee notes that the entire Russian communication system relies on imports.
Here’s how the process of purchasing goods is described by an interviewee: “My guys went to the factory for the first time, they entered there. The room was a kilometer long, an exhibition hall. They see prices, $150 for [active] headphones. They want to buy. But when the Chinese find out what they are needed for, they say: ‘You’re in the wrong place; you need to go to another door, and a Chinese person has to go in.’ And there, the same headphones are available, but not in such fancy packaging and without an American licensee — they cost only $19 when purchased wholesale.”
Moreover, according to these rules, the Chinese trade not only with Russians but also with those who support Ukraine. For example, an interviewee mentions that he has encountered Poles at a nearby table who were purchasing equipment and gear for the Ukrainian army.
Most of the goods are officially imported into Russia, but in some cases, importers have to work in the gray market.
“Many things, like radios, are difficult to certify quickly [in Russia],” explains one of the importers.
According to him, gray imports, which means without customs clearance or under “unofficial” names, are actively being brought in through Kazakhstan.
“The fastest and the darkest delivery is by road transport,” says another interviewee from Verstka.
A few boxes of goods are simply concealed in a regular car or a fully-loaded truck, which no one will notice or turn a blind eye to as agreed upon. He adds that a lot of such “dark” shipments go directly through the Russian-Chinese border.
Verstka’s interviewee, who transports goods for the needs of the Russian military, does not profit from parallel imports. Initially, he only transported goods for volunteers. Then, he continues, he was approached by the governments of several Russian regions.
“They asked for supplies for their own needs, and we provided them. Then *** region — I also fully equipped them with copters, helmets, and thermal imagers,” he says.
To expedite customs clearance, he uses his connections.
“I already have contacts in the Federal Customs Service and with senators. I bring a shipment, make a call, and say that this needs to be cleared, and they do everything for me within a day,” he explains.
Since the beginning of the war in Ukraine, there is a growing opinion that the sanctions against Russia are not working as intended. Russia is successfully circumventing them. In the latest, already the 11th package of sanctions adopted in late June, the EU included a mechanism to impose restrictions on third countries that help Russia evade sanctions. It proposes, as a “last resort,” limiting the supply of goods to countries violating the sanction regime.
Compared to the previous year, transporting goods to Russia has become more challenging, notes the logistician, Armen. Suppliers have started to address this issue. The reason is that manufacturers receive sales statistics by country. Suddenly, for example, they notice that sales of their products in Turkey have doubled. Some companies, upon observing such anomalies, may impose limits on selling their products to Turkey.
“In other words, they break the chain not directly to Russia but through distributors,” he says.
This happened with one of the companies whose goods were transported by the intermediary, Right-flow. This company is engaged in the production of geological equipment. In such situations, they have to find another country for transshipment, which, in turn, leads to an increase in the cost of goods. According to their research, experts at Silverado indicated that complete export control to Russia is only possible with the involvement of private companies.
Originally posted by Alexander Atasuntsev on Verstka. Translated and edited by the UaPosition – Ukrainian news and analytics website
