Turkey’s soaring exports to Russia trigger sanctions evasion fears and diplomatic tensions

ANKARA — Turkey has experienced a sharp increase in exports of crucial goods to Russia, sparking concerns of potential sanctions evasion. The surge in exports, particularly items vital for Moscow’s military production, has drawn the attention of the United States and the European Union, both actively working to restrict Russia’s access to dual-use goods through intermediary nations.

During the first nine months of 2023, Turkey reported a staggering €144 million in exports — including microchips labeled as “high priority” by the US — to Russia and five “former Soviet countries”. This figure is three times higher than the same period the previous year, surpassing the average recorded from 2015 to 2021.

Bypassing Sanctions Through Former Soviet States

The US and the EU have been actively trying to limit Russia’s import of dual-use goods through third-party countries. Concerns have been raised about nations like Kazakhstan, Serbia, and Turkey re-exporting sanctioned products to Russia, supporting Moscow’s military efforts, notably in the ongoing conflict in Ukraine.

Brian Nelson, the US Treasury Undersecretary for Terrorism and Financial Intelligence, is scheduled to visit Turkey this week to discuss measures aimed at preventing financial activities that may inadvertently aid Russia’s war efforts. Simultaneously, the EU is reportedly preparing a financial package that includes measures to impede Moscow’s ability to circumvent sanctions.

While exports from countries like Kazakhstan, Serbia, Turkey, Armenia, Azerbaijan, and Uzbekistan have seen a decline in the second half of 2023 compared to the beginning of the year, they remain notably higher than pre-war levels. Turkey’s role in facilitating this trade has become a point of contention, prompting increased attention from the US Treasury. Brian Nelson’s upcoming visit underscores the urgency with which Washington seeks to address and curtail this trade.

Challenges in Curbing Sensitive Goods Supply

Efforts to cut off the supply of sensitive goods to Russia face challenges due to the dual-use nature of the items, which have both commercial and military applications. Turkey’s reported imports of high-priority goods from G7 countries have risen over 60% in 2023, reaching nearly €457 million.

Ankara, often serving as an intermediary destination for Russian entities seeking multi-stage import routes to circumvent controls, faces increasing pressure from Washington and its European allies. The gravity of the situation lies in the fact that the high-priority goods exported to Russia are reportedly used in the production of cruise missiles, drones, and helicopters, according to US and EU battlefield assessments.

In the coming weeks, heightened scrutiny and diplomatic efforts are expected to address the intricate web of sanctions evasion and sensitive goods trade involving Turkey and Russia. The situation adds complexity to Turkey’s relations with the West, especially as Ankara seeks to purchase American F-16 fighter jets while facing pressure regarding Sweden’s potential accession to NATO.