Enforcement of Ukraine Sanctions must Begin at Home

After almost two and a half years of tightened sanctions, few Western aircraft, vehicles and electrical machinery are likely to be able to continue to be used reliably in Russia for military or similar purposes. However, US and German exports indicate that goods, including strategically important ones, appear to be being diverted to Russia-friendly countries.* While this does not mean that the sanctions have been violated, it does mean that the effectiveness of the sanctions is being seriously compromised, resulting in large additional humanitarian and economic costs.

Growth of US and German exports to Russia’s neighbouring countries

US exports to Russia fell from a monthly average of US$511.5 million from January 2018 to January 2020 to US$59.6 million from March 2022 to May 2024, or one-eighth of the pre-war level.† ** During the same period, total average monthly US exports to the world increased by about one-quarter. Russia was not a major export destination for the US before the war, accounting for only 0.4 per cent of total US exports. At the same time, US exports to Georgia and Kazakhstan have doubled and to Armenia more than fourfold since the start of the Russian invasion.

The US export trend also applies to critical strategic sectors such as aircraft and spare parts (HS 88), vehicles and spare parts (HS 87) and electrical machinery (HS 85). While US aircraft exports to Russia averaged US$124.1 million per month before the war, since then they have averaged US$0.1 million. US aircraft exports to Armenia have increased twenty-six times in the same period. US vehicle exports to Armenia, Azerbaijan, Georgia and Kazakhstan are more than three times the pre-war level.

A similar pattern can be seen in Germany. Total German exports to Russia averaged US$2,556.9 million per month from January 2018 to January 2020, compared to US$904.8 million from March 2022 to May 2024.** In the same period, total German exports to the world increased by around one-eighth. Russia’s share of German exports fell from 2.0 per cent before the war to 0.6 per cent since. Total monthly German exports to Armenia, Azerbaijan, Georgia and Kazakhstan are almost twice as high as before the war.

German vehicle exports to Russia fell from an average of US$367.5 million per month before the war to US$28.8 million per month afterwards. In the same period, German vehicle exports to Armenia and Georgia fourfold and to Kazakhstan more than sixfold. While German exports of electrical machinery to Russia fell to around a tenth of the monthly average before the war, they increased twofold to Kazakhstan and fourfold to Armenia.***

The trend of export diversions remains at a high level for the USA and Germany, especially for aircraft and spare parts. Average monthly exports to Armenia, Azerbaijan, Georgia and Kazakhstan increased by several hundred per cent in 2023 and 2024.

Limited efforts to strengthen sanctions by the European Union

Germany is not the only country within the E.U. that seems to be using the export detours. For the E.U. (including Germany) exports to Armenia, Azerbaijan, Georgia and Kazakhstan since the war increased one and half times and for vehicle exports more than three-fold.

The increase in exports to Russia-friendly countries shows indifference at best. At worst, it allows Russia to wage war for longer. The export patterns indicate that Russia has managed to source very important goods and especially parts, even in strategically important sectors, not from new sources but from existing ones.

The E.U. is trying to curb the risk of circumvention and considered introducing a ‘non-Russia clause’ on a larger scale in its 14th sanctions package: ‘The Commission will […] examine other appropriate measures to restrict Russia’s access to sensitive goods […], including the possibility of requiring economic operators in the Union to require that their subsidiaries in third countries also apply the “non-Russia clause”.’ However, Brussels could only agree to assess the impact of such a clause, but not to introduce it, as Germany had allegedly objected.

The data seem to illustrate that sanctions are deeply undermined by export diversions including in key strategic sectors and that these have remained at a high level, thus ensuring a steady supply (chart). Exports to Russia are low for both the USA and Germany. This means that a relatively small number of companies are incurring enormous social costs for private gain. Pointing the finger at other countries that may contravene sanctions is important. But it is high time for the US and Germany to ensure that sanctions are effective at home.****

† The reference period was brought forward due to the Corona pandemic.

* All data from U.N. Comtrade, based on the Harmonised System (HS) two-digit level classification and processed by Hanseanalytics.io.

** Last reported.

*** U.N. Comtrade stopped reporting German aircraft exports to Russia from March 2022.

**** The data does not indicate that the sanctions regime has been breached. Not all sectors are subject to sanctions and residual exports to Russia may not mean that sanctions are not being complied with.

A German version of this article is also available here.