LExport controls are an essential part of the sanctions regime against Russia. They aim to limit the import of goods essential for war and thus harm the Russian military industry. Research, including from the Kyiv School of Economics, as well as media reports have repeatedly shown that the application of these restrictions faces big problems in practice.
In 2023, Russia imported $12.5 billion worth of products considered by the European Union, the United States and their partners to be particularly important to the Russian war effort. These include microelectronics and communications equipment, but also machines for manufacturing weapons and munitions. Although there are indications that Russia is being forced to pay significant price premiums to obtain sanctioned goods through complex supply networks, Russian imports have essentially returned to pre-war levels.
In practice, Ukrainian authorities continue to find the same Western components in Russian weapons as two years ago. The importance of goods produced in China in the Russian war economy is also increasing. Yet over 90% of all foreign parts discovered in missiles, drones, tanks, etc. come from manufacturers in countries participating in export controls, according to Ukraine’s anti-corruption agency NACP. Imports of these war-essential goods complicate the already difficult situation on the battlefield and also contribute to continued air attacks against civilians.
The many obstacles to effective control
Enforcing export controls is difficult because many Western companies’ products are manufactured abroad and sold and shipped to Russia through a vast network of intermediaries in countries such as Chile, Turkey and the United Arab Emirates. Furthermore, EU exports to Central Asia and the Caucasus have also increased massively, indicating significant circumvention efforts.
Companies do not have the capacity or willingness to effectively control their supply and distribution chains. In a world where economically important countries do not participate in sanctions, or even encourage their circumvention, new strategies are required. The financial system, still dominated by the West, could be used as leverage to make the application of export controls to Russia more effective.
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