Young, small Dutch businesses circumventing sanctions against Russia

Dutch exports to Russia have decreased significantly since the European Union sanctioned the country for invading Ukraine. But there are indications that particularly young small are circumventing the sanctions by exporting to intermediary countries, Statistics Netherlands (CBS) and the University of Groningen reported after investigating Dutch exports of sanctioned goods.

The European sanctions ban the export of items to Russia that can be used for military purposes. The list includes a wide variety of items, ranging from chips, uranium, and ships to bacteria, and fungi.

The study showed that the value of the exports of these sanctioned groups dropped by around 86 percent in 2023 compared to the average of the years from 2018 to 2021. However, a group of companies emerged that have only started selling the sanctioned goods after the extra sanctions against Russia were implemented in 2022. These companies are typically small and relatively young.

According to CBS, these companies may be circumventing the sanctions by selling goods to Russia-friendly countries like Armenia, Kazakhstan, Kyrgyzstan, Mongolia, Serbia, Turkey, and Turkmenistan.

Dutch exports of sanctioned goods to these seven countries have grown “remarkably strongly,” increasing as much as 90 percent in some cases, CBS said. And exports from these seven countries to Russia have not decreased, and in some cases increased since the sanctions took effect.

“This could indicate that sanctioned goods from the Netherlands still reach Russia via these countries,” CBS said.