Turkey's significant increase in exports of critical goods to Russia sparks fears of sanctions evasion, leading to urgent diplomatic discussions and potential ramifications for Turkey's relations with NATO.
ADVERTISEMENTTurkish exports of essential goods to Russia, crucial for Moscow's military production, have experienced a significant spike in 2023.
This surge has intensified worries about potential sanctions circumvention, with the United States and the European Union actively seeking to curb Russia's access to dual-use goods through third-party nations.
Turkey recorded a staggering €144 million in exports of 45 goods, including microchips marked as "high priority" by the US, to Russia and five "former Soviet countries" suspected of acting as intermediaries for Moscow during the first nine months of 2023.
This figure is three times higher than the same period in the previous year, surpassing the average of €26 million recorded from 2015 to 2021.
Using former Soviet states to bypass sanctions
The US and the EU have long been working to limit Russia's import of dual-use goods through third-party countries, with concerns specifically raised about companies in states like Kazakhstan, Serbia, and Turkey re-exporting sanctioned products to Russia, thereby supporting its military efforts, particularly in the context of the invasion of 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 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.
Bloomberg reports that 80% of Russia's purchases of "high-priority items" are coming from China and Hong Kong.
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.
The US is concerned
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.
Efforts to cut off the supply of sensitive goods to Russia have been complicated by 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% so far in 2023, reaching nearly $500 million (€457 million).
The country, along with the United Arab Emirates, often serves as an intermediary destination for Russian entities seeking to exploit multi-stage import routes to circumvent controls.
Official data from Turkey raises suspicions, with significant discrepancies between reported exports and the corresponding lack of matching rises in imports in intermediary countries.
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.
Washington and its European allies have called on Turkey to take steps to limit this trade, as reflected in the US Treasury Department's recent sanctions on Russia.
However, Ankara has maintained strong diplomatic and trade links with Russia, pledging not to help Moscow circumvent Western export controls.
As tensions escalate, the trade dynamics could have broader implications for Turkey's relations with the West, especially as Ankara seeks to purchase American F-16 fighter jets while facing pressure from the US and Europe regarding Sweden's accession to NATO.
ADVERTISEMENTThe coming weeks will likely see increased scrutiny and diplomatic efforts to address the intricate web of sanctions evasion and sensitive goods trade involving Turkey and Russia.
