When a country faces sanctions, it often seeks alternative means to maintain its trade and evade the restrictions. Belarus, for example, faced sanctions imposed by the USA, which affected its timber trade. Timber was a significant source of revenue for Belarus, with exports primarily directed towards European countries.
Sanctions Evasion Techniques
To circumvent the sanctions and continue its timber trade, Belarus likely explored various strategies. One approach could involve rerouting timber exports through intermediary countries not subject to the same sanctions. This tactic allows Belarus to disguise the origin of the timber and avoid direct scrutiny from sanctioning countries.
Additionally, Belarus might have engaged in trade-based money laundering, a method used to disguise the origins of illicit funds through trade transactions. By manipulating the invoicing and pricing of timber exports, Belarus could potentially move funds across borders without detection.
Rerouting through Poland
An investigative report has uncovered a clever tactic employed by Belarus to bypass sanctions, revealing that Belarusian timber is being exported to the EU through Poland under the guise of originating from Kazakhstan. This deceptive practice has seen a staggering increase in timber imports from Kazakhstan to the EU since Russia invaded Ukraine, rising from €387,000 in 2021 to almost €126 million in 2023, with Poland accounting for over half of this amount.
Journalists from Radio Free Europe, Gazeta Wyborcza, and the Belarusian Investigative Center have revealed that Belarusian companies are falsifying shipping records to make it appear as though the timber is coming from Kazakhstan, thus evading EU sanctions implemented since June 2022.
Concerns have been raised about the effectiveness of sanctions enforcement, with Garstka acknowledging that the circumvention of sanctions persists due to inadequate measures. Additionally, Poland’s customs service admitted its limitations in thoroughly examining all customs declarations and invoices.
Belarus Exports Via Poland
Furthermore, Central Asian countries have become alternative routes for EU companies to sidestep sanctions on exporting to Russia and Belarus. This trend has been exemplified by Poland’s exponential increase in exports to Kyrgyzstan following the invasion of Ukraine.
Central Asian countries, including Kyrgyzstan, have emerged as alternative routes for European Union (EU) companies seeking to circumvent sanctions imposed on exporting to Russia and Belarus. This shift in trade routes has become more pronounced, especially following the invasion of Ukraine. Poland, in particular, has seen a significant surge in exports to Kyrgyzstan, highlighting the growing trend of EU businesses diversifying their export destinations.
By leveraging alternative routes through Central Asia, companies can continue to access markets that may have been affected by sanctions on Russia and Belarus. This trend underscores the importance of adaptability and flexibility in international trade, especially in the face of geopolitical challenges and shifting regulatory landscapes.
The EU put restrictions on timber from Belarus, which usually sells wood worth more than $1 billion to the EU each year.
After the sanctions, Poland started importing more wood from Kazakhstan, increasing from $15 million to nearly $74 million between 2022 and 2023. This is surprising because Kazakhstan doesn’t have many forests and used to send only small amounts to the EU before the war.
Journalists looked into a deal where a Polish company, PLRBL, was buying about 1 million euros ($1.1 million) of timber from a Kazakh company, Nurr-electro. However, Nurr-electro denied ever making such a deal, and experts found that the signatures and seals on the documents were fake.
An employee of Gallardo, a Belarusian company that transports wood, said they never went to Kazakhstan but picked up the wood in Belarus. The investigation suggests that this was done with the help of SO RBL, a Belarusian company whose owner, Oleh Yanovych, is also the chairman of PLRBL in Poland.
Furthermore, this development highlights the economic interdependencies between regions and the ripple effects of geopolitical events on global trade patterns. As EU companies explore new avenues for trade, Central Asian countries are poised to play a more significant role in facilitating international commerce and serving as crucial hubs for trade diversification strategies.
In a related incident, Polish fashion retailer LPP faced backlash and a share price decline after reports exposed its alleged deceptive practices, indicating a continuation of exports to Russia via Kazakhstan despite claims of withdrawing from the Russian market.
