Turkey’s exports to Russia of goods vital for Moscow’s war machine have soared this year, heightening concerns among the US and its allies that the country is acting as a conduit for sensitive items from their own manufacturers.
The growing trade, and the corresponding rise in imports to Turkey of 45 civilian materials used by Russia’s military, has undermined US and European attempts to curb Moscow’s ability to equip its armed forces, fuelling tensions between Ankara and its Nato partners.
In a sign of how it has become a priority in Washington to rein in this trade, Brian Nelson, US Treasury under-secretary for terrorism and financial intelligence, will visit Istanbul and Ankara this week, where he is set to discuss “efforts to prevent, disrupt, and investigate trade and financial activity that benefit the Russian effort in its war against Ukraine”.
It will be Nelson’s second trip to Turkey this year and comes amid indications that some dual-use parts — identified by the US and its allies as being of particular value to the war — are being transported directly to Russia even when they have been labelled as going to another country.
Efforts to cut off this ghost trade to Russia have been complicated as the items have both commercial and military applications.
In the first nine months of 2023, Turkey reported $158mn of exports of 45 goods the US lists as “high-priority” to Russia and five former Soviet countries suspected of acting as intermediaries for Moscow. That was three times the level recorded over the same period in 2022, when the war in Ukraine began.
The average figure for 2015-21 was $28mn, according to a Financial Times analysis of data from customs database Trade Data Monitor.
The 45 categories of goods, which include items such as microchips, communications equipment and parts such as telescopic sights, are subject to US, EU, Japanese and UK export controls aimed at preventing them from entering Russia. But these can be circumvented by companies using middlemen structures to disguise their ultimate destinations.
Turkey’s imports of high-priority goods from G7 countries are up more than 60 per cent so far this year compared with the same periods between 2015 and 2021 to nearly $500mn.
The trade flourishes by exploiting regulatory gaps between US export controls and EU enforcement, according to Emily Kilcrease, director of the Energy, Economics and Security Program at the Center for a New American Security think-tank.
“With some of the third-party countries like Turkey, we’re really at a weaker enforcement position than we’d ultimately like to be,” said Kilcrease, a former deputy assistant US trade representative. “We really have to lean on those countries to take enforcement actions in their own jurisdictions, to get at the specific entities that are facilitating the trans-shipment.”
Turkey, along with the United Arab Emirates, often serves as an intermediary destination for Russian entities seeking to exploit multistage import routes to get around controls, said a European sanctions official. It was particularly used to procure European goods, the official added.
Official data from Turkey showed a surge in declarations of exports of high-priority goods to ex-Soviet nations Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan and Uzbekistan, but those countries’ statistical agencies have not recorded a matching rise in imports.
These large discrepancies suggest that items reported by Turkey as destined for intermediaries were instead being transported directly to Russia, analysts said. Kazakhstan recorded high-priority goods imports from Turkey of $6.1mn in the year to September, but Turkey’s data shows exports of those goods to Kazakhstan amounted to $66mn over the same period.
“It’s obvious these goods are going to Russia,” said Elina Ribakova, a senior fellow at the Peterson Institute for International Economics think-tank and vice-president for foreign policy at the Kyiv School of Economics.
Russia uses the high-priority goods in its cruise missiles, drones and helicopters, according to US and EU battlefield assessments.
Washington and its European allies have called on Turkey to take steps to limit the trade, according to two western officials briefed on the matter. The US Treasury department also flagged the issue this month in its latest round of sanctions on Russia.
Kilcrease said if Ankara did not crack down on the trade, then “the US and its partners are going to have to take enforcement action”.
Turkey has retained strong diplomatic and trade links with Russia, while also pledging not to help Moscow circumvent western export controls.
The county’s foreign ministry said while it did not abide by western sanctions, “strict monitoring and prevention of efforts to skirt sanctions through Turkey is an integral part of our . . . policy”.
It added that although Turkey’s large financial and industrial businesses “strictly comply” with measures to avoid this type of trade, “inevitably, there are evasion attempts by obscure and insignificant entities that are uneducated about or indifferent to sanctions”.
Azint Elektronik, an Istanbul-based electronics supplier, was hit by US sanctions this month for allegedly making “shipments to Russia containing high-priority goods such as electronic integrated circuits”.
Russian customs data showed the company sold $1.3mn of equipment to the country in the year to July, of which $300,000 comprised high-priority items. Azint told the FT: “We were confident that the products we sent were legal.”
The listed buyer of the high-priority goods was IC Component, a St Petersburg company whose filings list one director and shareholder, Elena Frolova. Leaked Russian records suggest Frolova has a connection to another St Petersburg group, EKB Neva, on which the US imposed sanctions in May.
The US state department described EKB Neva as a “supplier of electronic components, including radio components, microcircuits, connectors, resonators, diodes, capacitors, and resistors”.
Frolova’s phone number is listed in address books as being for EKB Neva. She has also ordered takeaway food to be delivered to the company’s address. Frolova did not reply to a request for comment.
The trade tensions come at a sensitive moment for Turkey’s relations with the west. Ankara is seeking to purchase billions of dollars worth of American F-16 fighter jets, while the US and Europe are pushing Turkey to approve Sweden’s accession to Nato.