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Since the beginning of the war, Swiss companies have been supplying many more products to countries close to Russia. Not everyone likes that.
Author: Andreas Kohli and Rahel Winkelmann
Uzbekistan: up 24 percent. Kazakhstan: up 39 percent. Armenia: up 170 percent. Swiss exports to Central Asia increased massively last year – mainly due to pharmaceutical exports.
Caption: Swiss exports to the countries bordering Russia increased significantly last year. SRF
Exports continue to rise this year, according to figures from the Federal Office of Customs and Border Security. Now there are also watches, precision instruments, jewelery and machines. Growth rates of 30 percent and more – the export volumes are, however, many times smaller than those in the main Swiss markets.
What works in Russia also works in Uzbekistan
According to Alberto Silini from the export promoter Switzerland Global Enterprise, Kazakhstan and Co. have offered Swiss SMEs new opportunities since exports to Russia were taboo. Because the writing is Cyrillic here and there, you can take over the marketing one-to-one. “What worked in Russia will most likely also work in Uzbekistan or Kazakhstan,” says Silini.
What he also observes, however, is that new companies of Russian origin have sprung up in the immediate vicinity of the Russian border in Uzbekistan and Kazakhstan. Silini advises Swiss SMEs to carefully examine partnerships in order to avoid circumventing transactions – above all it is important what happens to the products supplied.
Bypass deals: nothing new
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Alexander Libman from the Free University of Berlin says that large-scale blockades of sanctions usually lead to circumvention. An example: the sanctions against South Africa during apartheid. “Countries like Lesotho and Swaziland played exactly the same role back then: gates into the sanctioned South African economy.”
Because: Deliveries from these countries to Russia have also increased since the beginning of the war. Alexander Libman, a Russia expert at Freie Universität Berlin, is concerned: “It’s realistic that sanctions will be circumvented in such cases.”
Kazakhstan, Kyrgyzstan, Belarus and Armenia are members of the Eurasian Economic Union. “So there are no customs borders between these countries and Russia,” says Libman, “which makes them particularly attractive gateways if you want to get into the Russian economy.”
US sanctions with consequences
This has long been a cause for concern in the EU, because exports from there to neighboring Russian countries have increased exorbitantly in some cases. Now the EU wants to ban the export of some sanctioned goods to third countries – “with a view to certain third countries”, as it says in the 11th sanctions package against Russia.
The USA also suspects bypass transactions. You recently sanctioned a Russian payment system for transactions between Russia and neighboring countries – Kazakh and Uzbek banks promptly stopped making payments.
Exports are particularly sensitive when they concern dual-use goods, i.e. goods that can also be used militarily. Then they go over the table at the State Secretariat for Economic Affairs Seco. At the request of SRF, Seco says that several Russian procurements of sensitive goods via Kazakhstan, Uzbekistan and Armenia have been prevented.