Smuggling on the Steppe: Russia’s Kazakh Sanction Backdoor

On 19th December 2023, the European Union sanctioned two Kazakh companies accused of aiding Russia’s war with Ukraine. Russia has been importing Western dual-use goods from Kazakhstan, circumventing Western sanctions. Despite having close relations with Russia, Kazakhstan has remained neutral on the war in Ukraine. Kazakhstan operates a “multi-vector” foreign policy, being at a geopolitical crossroads between China, Russia and the EU. Foreign investment and trade are crucial to the Kazakh government’s ongoing modernisation programme. Rocked by public protests in January 2022, Kazakh President Kassym-Jomart Tokyaev has been rapidly reforming Kazakhstan’s economy. Tokyaev has however been slow on political reform. The next 12 months are important internationally for the Tokyaev regime as Kazakhstan balances its relationship with Russia, China and the EU to leverage legitimacy at home.

Key Judgement 1. It is unlikely sanction loopholes will close in the next 12 months unless the EU introduces state sanctions on Kazakhstan.

Key Judgement 2. It is almost certain that Kazakhstan will maintain close economic and security ties with Russia over the next 12 months.

Key Judgement 3. It is unlikely that Chinese investment will significantly increase its influence in Kazakhstan over the next 12 months.

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