Since March 2022, the USA and the EU have banned the importation of their banknotes into the territory of the aggressor country, but since then, Russia has received about 2.3 billion dollars and euros to bypass sanctions.
Points of attention
- Over 2.3 billion dollars and euros have flowed into Russia since March 2022 to bypass sanctions, with cash being used for precious metals payments.
- The process of circumventing sanctions involves cash shipments from the UAE and Turkey, as well as cash-for-gold deals to support the Ruble.
- Involvement of foreign companies, banks, and state military structures plays a significant role in ensuring the flow of dollars and euros into Russia despite imposed sanctions.
- Russia's central bank has restricted the issuance of foreign currency cash to individuals following the invasion of Ukraine.
- Despite threats and sanctions from the US, Russia continues to find ways to import currencies, with Chinese yuan gaining importance in Moscow.
How dollars and euros continue to flow to Russia against the background of the imposed sanctions
In the material of the publication with reference to the data of the Russian customs, it is noted that cash dollars and euros continue to flow to Russia from the UAE and Turkey, which refuse restrictions on trade with the aggressor country.
It is emphasized that Russia has found a way to circumvent Western sanctions blocking the inflow of dollars and euros.
In December 2023, the US threatened financial institutions that cooperate with Russia in circumventing sanctions and imposed sanctions against companies from third countries.
The Chinese yuan has overtaken the US dollar to become the most important foreign currency in Moscow, although significant payment problems remain.
According to the head of Astra Asset Management's investment department in Russia, Dmitry Polovoy, a large number of Russians still want to have currency in euros and dollars for traveling abroad, small imports and saving savings.
Russia's central bank has been quick to limit the issuance of foreign currency cash to individuals since the invasion of Ukraine in an effort to prop up the weakening ruble.
According to data, from February 2022 to the end of 2023, only 98 million dollars in dollar and euro banknotes were exported from Russia.
However, inflows to the country of currency in euros and dollars were much higher.
The largest declarant of foreign currency was the little-known company Aero-Trade, which offers duty-free trade services at airports and on board airplanes.
During this period, she declared about 1.5 billion dollars in bills.
Aero-Trade registered 73 deliveries of 20 million dollars or euros each, all of which were cleared by customs at Moscow's Domodedovo airport.
The supplies were described in the customs declarations as barter or extortion from trade on board.
According to customs records, one €20m batch processed by Aero-Trade was imported last February by Yves Rocher Vostok, a subsidiary of French cosmetics group Yves Rocher, which still operates dozens of stores in Russia.
What is known about Russia's use of illegally imported dollars and euros
More than a quarter of the $2.27 billion in banknotes was imported by banks, much of which was used as payment for precious metals.
Several Russian banks received $580 million in cash from abroad between March 2022 and December 2023 and exported roughly equivalent amounts of precious metals.
For example, Russian lender Vitabank imported $64.8 million worth of banknotes from the Turkish gold trading company Demas Kuyumculuk in 2022 and 2023.
During the same period, Vitabank exported gold and silver worth USD 59.5 million to the Turkish company.
The company was involved in a series of cash-for-gold deals involving Vitabank and two other Russian lenders between March 2022 and September 2023.
Shipping banknotes from the UAE to Russia was the only solution Demas found to complete long-term contracts signed before Western sanctions came into force with Russian gold suppliers.
The documents show that other large importers of cash included companies controlled by the state-owned military-industrial conglomerate Rostec.
