Easily Circumvented Russian Sanctions Increasingly Point to One of Bidenomics’ Secret and Unsavory Features

Gently tapping a dog’s bottom when the four-legged friend eats your newspaper may deter further canine offenses, but slapping sanctions on Vladimir Putin’s Russia in the vague hope they will oust a tyrant’s troops from Ukraine — or oust the tyrant himself — does not seem to be having the same effect. They may even be having the opposite effect, emboldening rogue states and resourceful companies to find ways to dodge Washington’s fiscal maginot line in the sand by simply sauntering past it. That is one of the conclusions to be drawn from a steady stream of reports in respect of Russia.The reports document how easy it is for interested parties to sidestep the very sanctions that Biden officials repeatedly tout, and seemingly misrepresent, as an effective counterpunch to Russian warmongering in Europe. India bought $37 billion of Russian crude oil last year, CNN first reported. Some of the refined oil products made their way back to America, but that is almost beside the point.At New Delhi, Moscow has an eager customer. Moreover, as CNN reported, there are indications that a shadow fleet of crude oil tankers is using the cloak of the Mediterranean to flout some of the sanctions Washington and the EU have imposed on Russia. It may be tiny compared to the Atlantic, but once ships are a few dozen nautical miles away from any given port, even if their coordinates are easily tracked, their shipboard activities are almost impossible to monitor. As for that price cap on Russian crude? In a word, unenforced. The side effects of trying to crush Russia’s oddball economy through sanctions have to date been more keenly felt in Europe, where the French and German economies have been underperforming for years and where the cost of doing business was higher than in America long before the Russian invasion of Ukraine.Brussels, though, mostly in lockstep with Biden officials, imposed sanctions on Moscow, too — but the knife cuts both ways, and not only in terms of higher food and energy costs. A new study by a noted French business college, the Lille-based IÉSEG School of Management, found “statistical evidence that the EU sanctions are massively circumvented” for so-called high-priority items that are subject to EU export restrictions.These include manufacturing equipment and electrical components with potential military applications. The report found that EU exports of such goods to Turkey, the United Arab Emirates, Kazakhstan, and other “Kremlin-friendly” countries surged by more than $3 billion, or 82 percent, in the period between October 2022 and September 2023 compared to the previous year.Over the period to September last year, the EU’s export of such goods to Russia plummeted by 95 percent. This means that the drop in EU sales of dual-use items to Moscow was compensated by a sharp increase in exports of the same goods to mainly Central Asian countries, but that’s not all. EU exports to Kazakhstan jumped by 333 percent, the IÉSEG study found, and to little Kyrgyzstan by more than 1,600 percent. It concluded that “the surge of these purchases by third countries is too huge to be entirely caused by an increase in local demand, so that it can be suspected that a big part was thereafter exported to Russia.”Sanctions evasions are happening around the world, and in some places where office-bound Washingtonians may least suspect: Taipei, for example. Another new report finds that Free China’s exports of nitrocellulose — a key ingredient for gunpowder — are soaring. A joint investigation by London’s Royal United Services Institute and Ukraine’s Center for Defense Strategies reports that Taiwan has been supplying about fifth of the compound, which is essential for artillery shells and rocket systems, to Russia since that country’s invasion of Ukraine two years ago. One company, T.N.C. Industrial Co., based at Taoyuan City, Taiwan, appears to be a chief supplier. Less surprising perhaps is that the investigation found that most of the nitrocellulose sourced for Russia by Taiwan went through a Turkish middleman.Specifically, it was found that between March 1, 2022, and December 31 last year, Taiwanese shipments of nitrocellulose to Russia jumped to $5.43 million, compared to a meager $127,000 between 2019 to 2021. Taiwan’s Central News Agency, which first reported the details of the investigation, cited customs data from multiple countries as well as the UN’s commodity trade statistics database. It also noted that the nitrocellulose sourced from Free China was considerably less than that from Communist China in the same period.Nitrocellulose is in high demand, the Financial Times recently reported, because the EU and NATO member countries couldn’t produce enough of it to supply Ukraine’s war effort and as a result, “industry [has been] unable to rapidly meet expected EU orders for Ukraine, regardless of how much money is thrown at the problem.”A planned expansion of 155mm artillery production has been hampered, the FT reported, by “the dire need for shells, both to restock national armories and maintain supplies to Ukrainian forces.” It noted that an average shell today costs $920, or about 20 percent more than it did before the war.EU sanctions meant that Russia could no longer count on replenishing stocks from its traditional suppliers, the Netherlands and Italy. But North Korea’s huge stockpile of Soviet-era shells has helped fill the gap. As have savvy and unprincipled traders from Bishkek to Beijing by way, it increasingly seems, of Ankara, Taipei, and — who knows where else?

Easily Circumvented Russian Sanctions Increasingly Point to One of Bidenomics’ Secret and Unsavory Features

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