Russia: From Claims of 'Food Self-Sufficiency' to Circumventing European Sanctions

This year marks the 10th anniversary of Russia's 'self-sufficiency plan,' introduced by the Kremlin in response to Western sanctions following the annexation of Crimea and the conflict in Eastern Ukraine. Russia's first step in reaction to Western sanctions was to ban food imports from Western countries. Recently, the Federal Service for the Oversight of Consumer Rights, Rospotrebnadzor, announced that Russia has achieved complete food self-sufficiency. However, investigative journalists question the Russian officials' claims of achieving self-sufficiency, reporting that in some areas, Russia's dependence on imports has increased, with China becoming its main trading partner instead of Europe. Furthermore, reports indicate that imports from Europe continue through sanctions evasion. In winter 2024, a year after unprecedented Western sanctions were imposed on Russia in response to its war against Ukraine, several major Russian research institutes, commissioned by the government, introduced 'seven self-sufficiency strategies' aimed at compensating for the destructive consequences of severed trade-economic ties with Western countries. According to this report, prior to the large-scale military invasion of Ukraine in February 2022, Russia sourced about 20% of its needs through imports, but after sanctions were imposed, achieving self-sufficiency became 'vital for ensuring the stability and independence of the economy,' emphasizing that 'under the new conditions, Russia must find a way that only two countries in the world have experienced at times – South Africa during apartheid and the Islamic Republic of Iran.' In a recent updated report by the Higher School of Economics in Moscow, the Union of Industrialists and Entrepreneurs of Moscow, the analytical research institute of the Russian state financial and banking services company, and the Skolkovo Innovation Center, Russian experts say that about 25% of the items listed in last year's report have been implemented. For example, electric motor parts, generators, and transformers that were previously purchased from Europe are now produced domestically in Russia. On the other hand, Russia's imports in sectors such as automobiles, aircraft manufacturing, household appliances, and telecommunications equipment have grown several times compared to two years ago. According to this report, Russia's most significant weakness lies in advanced equipment and technologies. Simultaneously, Novaya Gazeta's analytical report indicates that the greatest successes in self-sufficiency are seen in food supply. According to this report, Russia fully meets its needs for various grains, meat, vegetable oil, and sugar domestically and also exports these products. However, between 20% and 40% of seeds are still imported. In other areas, the situation is entirely different. For instance, less than 25% of medicines and 22% of electronic devices needed by Russian citizens are produced domestically, and only 5% of passenger flights are conducted with Russian aircraft. The automotive industry is in the worst condition; according to the analytical agency 'Russian Automotive Market,' while about one million vehicles were produced in Russia and about 500,000 were imported in 2000, in the first half of this year, 300,000 vehicles were produced domestically, and 390,000 vehicles were imported from China. Furthermore, many goods that reach customers in Russia labeled as 'domestically produced' are not actually produced in the country; for example, only 7% of the raw materials for Russian medicines are domestically produced, and at least 45% of Russian electronic equipment is entirely made from Chinese components. According to the publication 'Vazhni Istori,' in 2023, goods worth at least $14 billion, which were declared prohibited for entry into Russia under Western sanctions, were exported from Europe to Russia. An employee of a transportation company, who wished to remain anonymous, explained to reporters how this method of circumventing sanctions works. According to him, companies have been established in 'friendly' countries in Central Asia or China that purchase the necessary goods in the European Union and determine the shipping route through Russian territory. After crossing the EU border, the driver crosses out the original destination of the cargo, such as Almaty in Kazakhstan, and writes a new destination, such as Moscow in Russia, and hands these documents to the customs officer in Belarus. Through this method, the cost of shipping 20 tons of cargo from Poland to Russia is about $5,500 (before the war against Ukraine, this cost was about $2,500), but if the same cargo is sent to Turkey and then to Russia, the costs double at least, and the delivery date is delayed by up to a week. According to 'Vazhni Istori,' which has obtained customs documents, the Russian company 'Kovazar,' a microelectronics manufacturer under US sanctions, purchased over $10 million worth of sanctioned goods in the European Union last year at the request of its representatives in China, Hong Kong, Azerbaijan, and Turkey, and sent them directly to Russia. According to this report, EU officials are aware of this method of circumventing sanctions. Customs officials in Lithuania told the publication that they are trying to monitor shipping documents more closely and seize 'suspicious' cargo, but they admit that preventing this method is practically impossible because 'someone needs to accompany this cargo to its final destination to know where that final destination really is.' The US and the EU are trying to close loopholes for Russia to circumvent sanctions, and sanctions have been imposed against many individuals and entities that assist Russia in this regard. However, many experts believe these efforts have not been successful so far. Countries allied with Russia, especially Turkey, Armenia, Kazakhstan, Kyrgyzstan, and Uzbekistan, as well as companies in Dubai and China, purchase goods that are sanctioned for export to Russia and then send them to Russia. According to the Munich-based Ifo Institute for Economic Analysis, imports of sensitive and dual-use goods in 2022 increased 50 times in Kyrgyzstan and 89 times in Kazakhstan compared to the previous year (before the start of the war against Ukraine). Experts say that the free trade conditions established within the framework of the Eurasian Economic Union make it practically impossible to control exports from member countries to Russia. Many analysts believe that the Kremlin's motivation for advancing the North-South corridor, which connects Russia to India and the Middle East through Iran, is also related to efforts to circumvent sanctions. Western officials have repeatedly accused China of supporting Russia's war against Ukraine, as many of the weapons Russia uses in Ukraine are produced with Chinese components. However, multiple reports indicate that components from Western countries are still reaching Russia and play a crucial role in the production of Russian weapons. Chinese officials have consistently denied the accusations against them, and Western companies claim that all their international contracts are under scrutiny. More than 15,000 sanctions have been imposed against industries and legal and natural persons in Russia by the US, EU, Canada, Australia, and Japan, but experts say the severity of the sanctions imposed against Iran is significantly greater.