Russia and Central Asia: Sanctions, Partnerships, and Economic Realities

Russia’s Deputy Foreign Minister Mikhail Galuzin, speaking at a Central Asian forum hosted by the Valdai Discussion Club, noted that several nations in the region may align with Western sanctions against Moscow because they are not ready to shoulder the associated risks.

Galuzin stressed that Moscow agrees with the Central Asian states on a fundamental point: unilateral economic sanctions are unacceptable and illegitimate. He added that some capitals prefer to avoid the risks involved and signal readiness to follow Western restrictive measures.

According to the official, Moscow does not dictate policy to other states in foreign or domestic affairs, provided that such policies do not breach mutual obligations under the CSTO, EAEU, and CIS.

He argued that the artificial severing of ties with Russia could inflict greater harm than the costs of secondary sanctions, a warning he believes is understood by the regional capitals.

Galuzin also emphasized Moscow’s commitment to deepening strategic partnerships with Kazakhstan, Kyrgyzstan, Turkmenistan, Uzbekistan, and Tajikistan.

The risk of sanctions from the EU and the United States

In early May, Bloomberg reported that the European Union is weighing measures against countries aiding Russia in bypassing sanctions, with a focus on rising Kazakh-Russian trade. After Western bans on certain goods, Moscow introduced parallel imports, allowing goods to enter Russia without consent of the origin trademark owner. The head of Russia’s Federal Customs Service, Vladimir Bulavin, stated that by the end of 2022, parallel imports totaled about 2.4 million tons of goods valued above $20 billion.

The Financial Times noted that after the conflict began in Ukraine, Russia imported roughly $2 billion worth of European goods under the guise of transit to third countries, including Armenia, Kazakhstan, and Kyrgyzstan, with some sources suggesting the goods did not reach their stated destinations. Ursula von der Leyen, president of the European Commission, indicated that the EU could extend bans on transit of various goods through Russian territory.

Washington warned Central Asian states, including Kazakhstan, of sanctions risks for assisting Moscow. In April, Elisabeth Rosenberg, deputy assistant secretary of the Treasury for Financial Crimes, warned of heightened secondary-sanction risks for Kazakh banks and firms aiding Russia’s sanctions evasion.

That same month, the US Commerce Department imposed export restrictions on companies from Uzbekistan, Armenia, China, and other nations for allegedly aiding Russia in evading export controls and acquiring American goods for Moscow’s needs.

Kazakhstan’s challenges from sanctions

Akylzhan Baimagambetov, deputy governor of Kazakhstan’s central bank, commented on the impact of sanctions. He explained that while Kazakhstan seeks a neutral stance toward Russia, Moscow remains Kazakhstan’s largest trading partner, so the sanctions create real business difficulties. He noted that restrictive measures have a negative effect on economic activity in certain sectors.

Baimagambetov observed that the government is trying to prevent Russia from using Kazakhstan to circumvent sanctions, though the problem persists. He pointed out that export growth did not rise in 2022 compared with 2021, and Kazakh producers remain exposed to secondary sanctions.

Since April 1, Kazakhstan has operated a system to monitor goods imported from Russia. The government aims to curb the export of dual-use items from Kazakh territory to Russia.

Support from the United States

At the end of February, U.S. Secretary of State Anthony Blinken visited Kazakhstan and met with senior officials at a Central Asian summit in the C5+1 format, which included the foreign ministers of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan.

Kazakh Foreign Minister Mukhtar Tleuberdi described sanctions as having hardened Astana’s stance due to its deep economic ties with Russia. Kazakhstan, as a member of the Eurasian Economic Union, lacks hard borders with Russia, complicating free-trade management across member states. Tleuberdi stressed efforts to prevent Russia or allied firms from bypassing sanctions.

Blinken stated that Central Asian countries have adopted a firmer position on Russia, but cautioned that sanctioned goods might still reach Russia through regional routes. He pledged that Washington would license entities in the region linked to sanctioned Russian companies to give them time to disengage. The U.S. also pledged $25 million under the Economic Sustainability Initiative to help Central Asian countries diversify trade routes and attract private investment without relying on a single partner.

The Kremlin has repeatedly claimed that Russia remains a key economic partner for many countries in the region and that these ties are deeply rooted, making Western efforts to break them difficult.