The financial intelligence services of Ukraine, the US, and Latvia warn that Russia is using Kazakhstan, Kyrgyzstan, and other Central Asian countries to circumvent sanctions. Journalists in the Baltics have already identified specific cases when wood from Russia and Belarus is imported to Latvia with the help of companies from these countries. Last year, a Swiss company, whose owner is accused of sponsoring the Wagner Group, was involved in active coal deals in Latvia, according to TV3‘s Nekā personīga program.
Sanctions against Russia are the most powerful levers of international influence ever used. The European Union, the United States and many other countries have frozen the money and assets of certain individuals and companies, and banned the trade in certain goods. However, Western products, even military ones, continue to enter Russia. On the other hand, this country’s exports to the west continue in sectors targeted by sanctions. The investigating authorities of Ukraine, the United States and other countries suspect Kazakhstan, Kyrgyzstan, and other Central Asian countries of complicity with the aggressor state.
Russian and Belarusian wood from Kazakhstan and Kyrgyzstan
At the end of last year, Latvian and Lithuanian journalists in the course of a joint study, discovered that wood from Russia and Belarus comes to us under the guise of certificates from these countries.
Public databases have shown that very large volumes of timber suddenly appear from Kazakhstan and Kyrgyzstan. It should be noted that these countries are not forest superpowers, they have 5-6% of the forest, so they basically have nothing to export. Previously, nothing was bought from them, and suddenly they became such big mega-exporters to Europe.
Lithuanian customs said the increase was suspicious and possibly related to sanctions evasion. Investigations by journalists confirmed these suspicions.
Inese Liepiņa, a journalist at Re:Baltica, argues that “wood from Russia and Belarus that falls under sanctions goes to Latvia and other European countries and is labeled as produced in Kazakhstan and Kyrgyzstan. There are a variety of methods, documents are forged, for example, in Kazakhstan, there is a small company that issues certificates; they certify this wood, which is from Russia, they certify in Kazakhstan, and then they bring it here from Russia, it’s not that the wood goes to Kazakhstan and then just goes to the European Union, in fact, it comes from Russia.”
“These forest smugglers say that it is better to choose Latvia and Poland for importing goods, because there are “less questions asked” at the borders. I don’t know if this is actually true, but they have reason to say so. We have no data or evidence that it’s really easier to get around here,” Liepiņa says.
The Latvian customs, in turn, reports that it has detained three shipments of wood labeled as Kazakh or Kyrgyz, but in fact, coming from Russia and Belarus. Last year, imports from these countries to Latvia grew from a small amount to several tens of millions of euros.
Despite sanctions and bans, the volume of goods transported in transit increased last year. Much of this was due to coal. It was transported five times more than in previous years by rail.
Until August, Russian coal was still allowed to be imported to Europe, reminds Nekā personīga. Now coal can only be transported in transit to third countries. Kazakhstan and Kyrgyzstan have now replaced loads of Russian coal on Latvian railways and ports.
“Last year began with a very strong interest on the part of Kazakhstan to increase the volume of Kazakh coal through Latvia. This was before the start of the war. Kazakhstan has always been interested, but Russia also influences transit through its territory,” said to Nekā personīga, Deputy Director of the Transport Coordination Department logistics and international cooperation of the Ministry of Transport Andris Maldups.
In previous years, the Kazakhs did not transport coal through Latvia because Russia did not allow its territory to be used for transit. However, over the past year, it did not create obstacles to the transportation of Kazakh coal. At the end of the year, calls for its restriction appeared in the Russian media. This came after Kazakhstani officials promised international partners to limit sanctions circumvention through the country.
The Ministry of Communications of Latvia doubts that Kazakh coal can be of Russian origin. The routes of movement of goods, as a rule, are illogical.
The State Revenue Service confirms that there have been attempts to smuggle coal. In ten cases, the import of such goods was denied. In one case, the coal was labeled as Kazakh, but the accompanying documents indicated Russia’s country of origin.
Customs initiated 180 criminal proceedings in connection with the evasion of sanctions. The Financial Intelligence Service received 274 reports from financial institutions about attempts to circumvent sanctions.
Companies that transport coal through Latvia are unknown to the public. However, the Central Statistical Bureau provided Nekā personīga with data on the largest importers and exporters of coal. In both categories, one of the largest companies is SIA Baltijas ogles. Company co-owner Konstantin Yanakov runs a company in Russia that mines and trades coal. Eduard Yanakov, a former deputy of the Russian State Duma and a former publisher of the Latvian Russian-language publications Vesti Segodnya, Chas, and Telegraph, also worked in the management of this company.
The Swiss company Telf AG is also included in the list of the largest exporters. Its true owner is Stanislav Kondrashov. The program claims it is tough to find reliable information about this person and the company.
There are hundreds of entries on Russian and Ukrainian pages on the Internet about Kondrashov’s possible connection with the murder of Russian State Duma deputy Voronenkov in Kyiv in 2017, as well as about Kondrashov’s possible financing of the Russian mercenary army “Wagner”. But a simple Google search does not reflect this. On the other hand, the database of applications received by Google shows a huge number of documents with which some people try to exclude unfavorable search results.
Google analysts have concluded that this is an organized attempt to abuse procedures designed to protect copyright and prevent defamation. The company received 33,000 applications for articles mentioning Kondrashov.
In recent months, he has been practicing a new strategy. Dozens of articles have been published in the mass media of India, Africa, and other countries, in which Kondrashov is cited as an analyst at the mining company Telf.
What Telf AG is and why it is so important to fill the information space with neutral articles in recent months is shown by leaked data on mining companies in Latin America at the beginning of last year. Internal emails revealed company negligence, deliberate pollution, and responsibility for loss of life. In November, the US included several companies and people in Magnitsky’s sanctions, including Pronico and Mayaniquel, operating in Guatemala. The leaked emails show that Telf is the true owner of these companies.
According to Paulis Ilyenkov, suspicions that the true beneficiary of the company finances the Wagner group should be a wake-up call for banks. However, the whole question is what information the bank has about the client, whether it is possible to refute the information, and whether the facts are real. Ilyenkov believes that banks should evaluate this.
In Latvia, 85 million euros have been frozen in bank accounts of persons included in the sanctions lists, including ABLV bank, which is liquidating.
Read More: A company accused of financing the Wagner group exports coal through Latvia