The United States has dealt the Russian economy another blow with sanctions. Russia is using all means to circumvent them. The focus is on smuggling.
Moscow – New Western sanctions have caused the Russian ruble to fall . This in turn is leading to higher inflation. The central bank has already issued a warning and drastically increased interest rates.
There is no solution in sight so far: on the contrary, the central bank could raise interest rates further. Because Chinese banks are also becoming increasingly nervous , Russia is resorting to new tricks.
Sanctions tricks in trade – How Russia circumvents the sanctions
The new round of sanctions imposed by the USA appears to have more far-reaching consequences than previously thought. Chinese banks are increasingly distancing themselves from their Russian business partners . The fear of being hit by secondary sanctions is too great .
At the same time, however, Russia is once again looking for tricks to circumvent the latest sanctions. Russian traders are apparently resorting to increasingly complex methods to pay their Chinese sellers.
The simple methods are no longer an option. Russia is excluded from the international SWIFT banking system, many financial institutions are sanctioned, and the Moscow Stock Exchange is no longer allowed to trade in euros or dollars.
As the Ukrainian newspaper Kyiv Independent reported , citing Moscow Times reporting, Russian traders are therefore resorting to “dubious” intermediaries.
This is how this new trick looks in detail: The middleman accepts the Russian rubles and, using “great administrative power”, transfers them to the Chinese seller.
The middleman is charged a commission of three percent. A financial advisor told the Moscow Times this .
When it comes to sanctioned or so-called dual-use goods (i.e. those that can be used both in war and for private use), the middlemen resort to illegal methods such as smuggling.
China is Russia’s most significant trading partner and a sanction profiteer.
China has become Russia’s most important trading partner over the past few years . The country is not actively supporting Western sanctions, which has led to Russia relying on China as a transshipment point for prohibited Western goods.
One of the beneficiaries of this is the Russian company Zala Aero, which produces a large number of the combat drones used in the Ukraine war for Russia. In some areas, China is “intentionally” not looking closely, complained sanctions expert Agiya Zagrebelska from Ukraine.
She is calling for sanctions against component and machine tool manufacturers who are allowing the Russian war of aggression to continue through their products.
On the other hand, China is benefiting from Russia’s increasing isolation on the world market. For example, Russian President Vladimir Putin had to agree early on to discounts that China had negotiated on natural gas deliveries. Otherwise, Russia would simply not have been able to get rid of the gas.
China is exploiting this dependency to gain economic advantages. . Economists are already predicting that China could be one of the big beneficiaries of the Ukraine war.
Russia’s economy in the grip of sanctions
In response to the war in Ukraine, the western allies of the attacked country had used a wide range of different sanctions to hamper Russia’s economy. These included import bans ( for example on Russian diamonds ), an oil price cap and export restrictions on goods such as electronics. https://youtu.be/NXvYWLEjUVg?si=PFExceGuceTwIaF_
Since then, Russia has been engaged in a kind of tug-of-war with the West over the sanctions. While the West tried to adapt them and ensure that they were effective, Russia had come up with suitable countermeasures for various sanctions. The West is increasing the economic pressure on Russia through new sanctions packages.