Customs data revealed that about $2.3 billion worth of dollar and euro banknotes have been shipped to Russia since the United States and the European Union banned the export of their banknotes to the country in March 2022 after the invasion of Ukraine.
The data, reported by Reuters and not previously reported, shows how Russia has managed to circumvent sanctions banning cash imports, and suggests that the dollar and euro remain important instruments for trade and travel as Moscow seeks to reduce its exposure to hard currencies.
Customs data obtained from a commercial supplier that collects and records the data is shown.
In December, the US government threatened to impose sanctions on financial institutions that help Moscow evade sanctions, and in 2023 and 2024 it imposed sanctions on companies from third countries.
The Chinese yuan has overtaken the dollar to become the most traded foreign currency in Moscow, despite some major payment problems.
Many Russians still seek foreign currency for trips abroad, as well as for small imports and savings, said Dmitry Polevoy, head of investment at Astra Asset Management in Russia. “For individuals, the dollar remains a reliable currency,” he said.
In 2022, Russia began describing the dollar and the euro as “poisoned” currencies, after sweeping sanctions hampered its access to the global financial system and disrupted payments and trade.
About $300 billion of the Russian Central Bank’s foreign exchange reserves have been frozen in Europe.
A European Commission spokesman said he could not comment on individual cases involving the application of sanctions. He added that the EU addresses cooperating countries when there is suspicion of sanctions evasion.
Customs records cover the period from March 2022 to December 2023, while more recent data could not be obtained.
More than a quarter of the $2.27 billion in banknotes came through banks, most of it in the form of payments for precious metals, according to customs records and a person familiar with the transactions.
Several Russian banks received banknotes from abroad worth a total of $580 million in the period from March to December, while approximately equivalent amounts of precious metals were exported.
Records show that shipments of gold or silver in many cases went to companies that paid in banknotes.
A source familiar with Dimas’ operations confirmed that it was involved in a series of cash-for-gold transactions involving Vitabank and other Russian banks between March 2022 and September 2023.
The source said that sending the banknotes via the Emirates to Russia was the only solution for Dimas to complete the long-term contracts signed with Russian gold suppliers before the Western sanctions came into effect, while adhering to Turkish and global regulations regarding international payments.
He added that backing out of existing agreements would expose Dimas to financial penalties and reputational risks. He explained that the Turkish company has never dealt with entities subject to Western sanctions, and strictly follows all national compliance procedures.
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2024-08-14 06:01:59