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Despite stringent sanctions imposed by the United States and European Union, around $2.3 billion in dollar and euro banknotes have entered Russia since March 2022, according to newly obtained customs data obtained by Reuters.

The data, covering transactions up to December 2023, reveals that Russia has successfully circumvented the restrictions designed to block cash imports.

How Russia Evaded Sanctions

The sanctions, which aimed to cut off Russia's access to Western financial systems following its invasion of Ukraine, included a ban on banknote exports. However, the customs records indicate that cash has been smuggled into Russia through intermediary countries such as the UAE and Turkey.

The data also shows that a great portion of these transactions involved banknotes arriving from sources with undisclosed origins.

In response, the US government has warned financial institutions about penalties for aiding Russia in evading sanctions, and imposed additional restrictions on third-party companies throughout 2023 and 2024.

But besides recent cash notes inflow, the customs data also reveals a notable increase in cash imports leading up to the invasion. This suggests that some Russians anticipated the sanctions and sought to protect their assets.

Among the major importers of cash were banks and state-controlled entities such as Rostec. At the same time, The Conversation also previously reported earlier this year that most transactions involving gold and silver trades have been used to facilitate these cash flows.

All of Russia's strategy makes it difficult to track banknotes, and therefore, evading US sanctions.

Tags

Russia, US Sanctions