CPC - Caspian Policy Center


central asia's gateway of dual-use technology and materials to russia

Central Asia's Gateway of Dual-Use Technology and Materials to Russia

Author: Samantha Fanger

Mar 28, 2024

Image source: shutterstock

Trade statistics indicate that there has been a significant uptick in China’s shipments of sensitive technology to Russia since 2022. The flow of military-applicable technology to Russia, via trade routes through Central Asia and Türkiye in particular, has raised red flags in the West. These materials include computer chips and routers as well as ball bearings used in tanks. These trade networks have allowed Russia to evade sanctions and continue obtaining Western technology for use in its war against Ukraine.

Networks of Chinese state-backed companies have strategically used globalized markets to streamline dual-use goods to Russia. One example of this is PRC state-owned defense company Poly Technologies Inc that operates in Western supply chains and financial markets. This effectively wrangles unknowing consumers and countries into providing material and financial support for Russia's invasion. In some cases, these products are manufactured by unsuspecting and prominent American corporations.

China has openly fostered its bilateral relationship with Russia even as numerous other global actors have either openly or discreetly shunned Russia with sanctions.  Central Asia's relatively unrestricted borders, lenient trade regulations, and profit-driven intermediaries make countries like Kazakhstan and Kyrgyzstan easy passageways for dual-use goods to make their way to Russia. According to China's customs data, the export of dual-use goods to Kazakhstan and Kyrgyzstan has seen a significant increase since the onset of the war in February 2022. Exports of the specified 45 goods reached $1.3 billion in 2023, marking a 64% rise compared to 2022. A significant quantity of these commodities, as outlined in reports from a Washington-based defense think tank, C4ADS, were later transported to Russia. Utilizing publicly accessible Russian customs documentation, C4ADS revealed its ability to monitor approximately $64 million worth of merchandise exported to Russia from Kazakhstan and Kyrgyzstan in the initial seven months of 2023. However, C4ADS noted that the dataset analyzed might not encompass the entirety of the transactions.

These activities have not gone unnoticed by the West. According to the EU, Russia imported only 10% lower than the pre-sanction period amounting to $8.8 billion in imports of dual-use goods in the first 10 months of 2023. In February, the EU approved a 13th set of sanctions aimed at Russia, targeting efforts to evade existing sanctions. This new package includes 27 additional companies from Russia and other countries linked to Russia's military-industrial complex. The EU plans to enforce export restrictions on these companies for dual-use goods and technology, as well as items that could bolster Russia's defense and security sector technologically. Specifically, the package identifies 17 Russian firms involved in manufacturing electronic components, particularly those used in drone production. Additionally, it lists four Chinese companies and one each from Kazakhstan, India, Serbia, Thailand, Sri Lanka, and Turkiye engaged in electronic component trade in Russia, including items of EU origin.

The EU has openly recognized the importance of fully implementing these sanctions to cut off Moscow's access to the revenue, goods, and technology necessary for its military endeavors. The European Commission has pledged ongoing support to Member States in enforcing these measures and should seek to enhance cooperation with the Central Asia and South Caucasus region to ensure the effective implementation of these sanctions.

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