US Says Armenia Helping Russia Evade Sanctions

Imports of key microchips and electronics by Russia are back to the levels prior to its invasion of Ukraine, as Moscow sought other countries to resell the hi-tech components after their purchase from European companies, Jim O’Brien, US State Department Sanctions Coordinator, said in a recent interview.

“Sanctions circumvention remains a ‘substantial problem’,” O’Brien told Politico, adding the US has identified countries involved including Armenia.

According to Politico, it accessed Customs records that showed trade between Russia and several countries from the Caucasus and Central Asia – including Georgia, Kazakhstan, and Armenia – has surged since Russia invaded Ukraine in February of 2022.

Meanwhile, the US and its allies are collaborating to keep the chips needed for weapons systems, drones, and tanks out of Russia’s reach. As a result, direct sales of chips to Russia from the US and its allies have plummeted to zero.

However, multiple reports confirmed that despite the preventive measures, in particular, sweeping sanctions packages, Russia has been procuring technology components critical for the repair and upgrade of its weapons.

In April, The New York Times wrote that millions of dollars worth of banned technology was channelled into Russia through Armenia and other countries.

A document provided to Politico by the US Bureau of Industry and Security revealed that between 2021 and 2022, Armenia’s imports of chips and microprocessors from the US shot up by 515 percent, while it surged by 212 percent from the EU markets. The bureau estimated that as much as 97 percent of such components were re-exported to Russia.

The trade turnover between Russia and Armenia exceeded $5 billion in 2022, hitting a record 91.7 percent growth year-on-year. In 2021, trade turnover between Russia and Armenia totalled $2.6 billion.

"According to the results of 2022, our trade turnover for the first time exceeded 5 billion (dollars), and it is important to say that both our exports and imports are growing evenly. ... We think we still have a fairly large potential for growth,” Russian Prime Minister Mikhail Mishustin said in February, on the first anniversary of Russia’s invasion of Ukraine.

Armenian government also confirmed that Yerevan continued in 2022 to expand cooperation with Russia in political, economic, military, security and other areas.

According to Trading Economics, electrical and electronic equipment topped Armenia’s exports to Russia in 2022 with $462.35 million.