The other war that the West does not win: Russia imports as much war material as before the invasion of Ukraine

While the president of Ukraine, Volodymyr Zelensky, is busy during his new European tour, this time through the Baltic countries, requesting more help to defeat Russia on the front; while the Atlantic Alliance, meeting this Wednesday in Brussels, committed to spending “billions” of euros to assist Kiev militarily, especially in its air defense; While all this was happening in 48 hours, Moscow spent a sum close to 56 million euros on the purchase of war goods. And all despite the trade restrictions approved in the West after the large-scale invasion that began on February 24, 2022. According to a report published this Thursday by the Kyiv School of Economics (KSE) center and the Yermak-McFaul Group ―led by presidential chief of staff Andrii Yermak and former US ambassador Michael McFaul―, Russian imports of war goods have largely recovered from their sharp decline following the imposition of export controls.

The study, prepared through the monitoring of commercial databases and under the title Challenges in the application of export controls. How Russia continues to import components for its military production, figures at 932 million dollars (851 million euros) the average monthly Russian expenditure on imports of goods destined for the battlefield (communications equipment, electronic components or semiconductors for exclusive military use, among others) from January to October 2023, the period analyzed. This sum is only 10% less than what Moscow spent before the trade sanctions.

Furthermore, 48.5% of these goods would originate from one of the countries in the coalition that precisely launched the restrictions. This does not mean that the seller, based in the United States, Australia, Japan, the United Kingdom or any Member State of the European Union, knowingly negotiates with Russian companies, but that the trace of his sales is lost in a complex network until reach third countries, that is, Moscow's direct partners such as, above all, China – governs all sections in the mapping of imports of these goods to Russia, as a producing country (47%), of origin (66 %), simply seller (40%) or country of product delivery (56%)―, but also Turkey and the United Arab Emirates, indicated by the report.

The report points out, however, that the purchase of other products that are fundamental for the war machinery, although for dual use, civil or military, has fallen by more than 28%, from the 2,933 million euros per month spent by Russia before February 2022 to 2,092 million on average in the first 10 months of last year. That is to say, according to KSE senior researcher Olena Bilousova, export controls can and did work after the invasion. “They force Russia,” continues Bilousova, from the center's headquarters in the Ukrainian capital, “to look for new trade routes and thus spend more money.” But it's not enough. “If new measures are approved we would have more effect,” she continues, “but if we stop, we would lose what we have achieved so far.” Among the recommendations of the study is the coordinated effort of the sanctioning countries, between institutions, financial entities, companies and even civil society. “That we reach,” this analyst points out, “a framework similar to that of international money laundering control.”

The report is relevant not only for what it says, but also for the moment. Once the large-scale invasion began, a coalition of countries, including the US, the United Kingdom, EU members, Japan, Australia, Canada and South Korea, extended an unprecedented framework of controls on exports to Russia ― expanded the scope of the measures adopted after the illegal annexation of Crimea and the invasion of the Donbas region in 2014―. By then, Russia had stock and its industry was already focused on the war – the purchase of goods for the battlefield also skyrocketed at the end of 2021, while the invasion was being prepared. The effect of any sanction was going to take a while. “But any kind of delay [en los efectos de las sanciones] has ended,” warns Bilousova. Either they work or they don't.

Change in trade routes

What is certain, according to research by the KSE and the Yermak-MacFaul Group, is that, thanks to export restrictions, Russia has suffered shortages of some valuable products manufactured by Western companies, especially in the electronics section. Also that the trade routes for this material have been transforming. Bilousova points out how, for example, the analysis of commercial databases has allowed them to identify changes in the group of Chinese suppliers to Russia as some companies from the Asian giant have joined the black list of the North American Department of Commerce; or how a Russian ally country like Kazakhstan went from zero imports of semiconductors to multiplying its purchases from February 2022.

Although the effects are moderate, surveillance from the West continues. serve as an example the inclusion on December 6 of 42 new companies on the US blacklist for providing the Russian army, including material for the production of drones with Iran in the new facilities in Tatarstan – in December alone, Russia launched more than 600 unmanned devices in the form of projectiles with an explosive charge against Ukrainian territory. Among the reported entities were, for example, four based in Cyprus, three in Belgium, one in Germany and another in the Netherlands. As a result of this measure, Belgian businessman Hans Maria De Geetere, 61, was arrested in an operation between Belgian authorities and the FBI.

The report Challenges in applying export controls It precisely highlights the possibility that US legislation has of prosecuting products that, although they do not respond to a manufacturer based in the US, do contain in their assembly some component, even minimal, of North American origin. But theory is one thing and practice another. The National Agency of Ukraine for the Prevention of Corruption has been able to identify 2,800 pieces of weapons used by Russia in its offensive – in missiles, drones, military vehicles. Of them, 95% come from producers in coalition countries; 72% of these originate in the United States.

One of those companies is Texas Instruments. An internal report from the Ukrainian Executive to which EL PAÍS has had access identifies Texas Instruments products in components of the Shahed drones used by Russia. In April of last year and given the information about the arrival of this company's microchips to the Russian market despite the sanctions, the technology company's board voted against internally strengthening control of the improper use of its products.

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