Recent investigations into trade involving Georgia and Kyrgyzstan reveal indicators of sanctions-busting behavior involving Russia.
In Georgia, the investigative outlet iFact published findings of suspicious patterns in an article titled “How Georgia Facilitates Russia’s Military Supply Chain.” To compile their report, journalists posed as individuals interested in shipping so-called “dual-use” goods to Russia from Georgia. In conversations with couriers, they found that there were few barriers to sending such goods to Russia as drones and computer processors, items which can serve both a civilian and a military purpose.
The investigative journalists, who backed up their investigation by analyzing trade data, acknowledged that there are inspection protocols in place to prevent illicit goods from crossing the Georgia-Russia border. However, the report added that “actual enforcement and thoroughness of these checks can vary, as seen in our findings.” And couriers can potentially circumvent Georgian restrictions by sending goods to Azerbaijan, Armenia, and countries in Central Asia before shipping them to Russia.
Georgian government officials haven’t yet directly commented on the August 1 report. The attention of the ruling Georgia Dream party in recent weeks has been more focused on doing damage control over an August 9 OCCRP investigation into the property holdings of “Honorary Chairman” Bidzina Ivanishvili’s family in Russia.
Georgia’s Revenue Service disputed the report, saying in a statement that “this is not the first time that the union of investigative journalists has leveled false accusations against the agency, claiming that sanctioned goods are entering Georgia’s territory uncontrollably and subsequently being exported to the Russian Federation.”
In the past, Georgian Dream leaders have denied allegations that Georgia is a facilitator for shipping sanctioned goods to Russia, citing a lack of conclusive evidence. “We are absolutely transparent,” said former Prime Minister Irakli Garibashvili in June 2023. “I declare with full responsibility – not a single fact has been presented to us that Georgia helped anyone avoid any sanctions.”
Georgia has not joined Western nations in sanctioning Russia since the full-scale invasion of Ukraine in 2022, saying that such a move would be disastrous for the economy. But leaders often claim that the country isn’t being used for circumventing sanctions imposed by Western nations.
It’s not only the government that says concerns about sanctions-evasion are overblown. Shortly after iFact’s report, the Swiss Institute of Global Affairs published an analysis of Georgia’s trade data that drew different conclusions. “[Scrutinizing] trade data and other detailed information indicates that often cited increases in bilateral and transit trade from/through Georgia to Russia can be explained with harmless developments and that, if some sanctions circumvention should happen, it would be on a negligibly small level,” the institute said.
Even so, the organization acknowledged that dual-use goods do appear on the list of Georgian exports to Russia – “namely some mechanical and electronic components.” iFact claimed in its report that the flow of such goods indicates “legal loopholes and logistical routes” are being exploited to benefit Russia’s war effort.
“At the very least, if the government sincerely claims to enforce sanctions and does not want to become a violator country, the best way would be to publish a separate list of high-priority battlefield items and issue additional restrictions on their export,” Maximilian Hess, a sanctions expert at the Foreign Policy Research Institute, told iFact.
“Practically, this means requiring exporters to clarify the final destination of the cargo. This is necessary to avoid the prohibited goods from reaching Russia through Georgia,” he added.
Meanwhile, a report published by RFE/RL raised questions about Kyrgyzstan’s role as a potential sanctions-buster involving goods moving between Serbia and potentially Russia.
The RFE/RL investigation found that Serbia’s trade with Kyrgyzstan has skyrocketed since the start of the Russia-Ukraine war in 2022. It also revealed a massive discrepancy in trade data compiled by Serbian and Kyrgyz state agencies, suggesting that a large volume of goods shipped by Serbia to Kyrgyzstan is re-exported to a third country.
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“Among the products delivered from Serbia to Kyrgyzstan, there are goods included in the sanctions list of the European Union and the United States, or, in other words, which Russia can use in the military industry,” according to the RFE/RL report.
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