Economic Scenarios

From Georgia to Kyrgyzstan: the complex journey of Western cars to arrive in Russia

In 2023, Georgia's government banned the re-export of cars to Russia, a move aimed at aligning with international sanctions against Moscow. But recent trade data reinforces suspicions that Georgia is still a key crossing point in a network used by Russia to import goods, especially cars.

According to data released by the National Statistics Office of Georgia, for the second consecutive year, cars were the most exported product from Georgia in 2024, for a total of over 2.4 billion dollars and 37% of the total volume of the country's exports .

Interestingly, the primary destination for all exports was not a neighboring country, but Kyrgyzstan, a Central Asian country more than a thousand miles away. Last year, exports from Georgia to Kyrgyzstan totaled $1.3 billion, a notable increase of 85% over the previous year's total. Do all Kyrgyz buy cars in Georgia?

The link between Georgia and Kyrgyzstan has long come under criticism for being a major supply conduit that Russia has relied on to overcome Western sanctions.

One of the cars that, in theory, should no longer be in Russia

Since Western countries began sanctioning Russia after the invasion of Ukraine, the Kremlin has used Kyrgyzstan as a back door to obtain sanctioned products , particularly dual-use components that help maintain the war effort. Russian. Cars are also an important item of imports: the number of cars entering Kyrgyzstan exploded to more than 180,000 in 2023, compared to around 40,000 in 2022, the year the Russia-Ukraine war began.

Georgia has long been known as a regional supplier of used cars . But the latest data represents a change in the dynamics of Georgian exports. As of 2023, Azerbaijan was the country's top trading partner and cars made up the majority of exports from Georgia, according to local media , with Azerbaijan importing more than $430 million in cars. This figure fell last year, although Azerbaijan – a country that has also been accused of re-exporting sanctioned goods, including cars, to Russia – was still Georgia's third-largest trading partner in 2024.

Observers note that discrepancies in official data mean that many cars apparently sold by Georgian sellers to Kyrgyz buyers do not reach their destination. On the contrary, they could be diverted to Russia.
“According to Georgian statistics, in the first 10 months of 2024… cars worth $964 million were sold as re-exports from Georgia to Kyrgyzstan. According to Kyrgyzstan statistics, cars worth about $50 million entered from Georgia. Where did over $900 million worth of goods disappear? ,” asked Roman Gotsiridze, a Georgian opposition politician, last November, adding that he believed the cars ended up in Russia.

Authorities in both countries say they are trying to contain the illicit trade. While Georgian officials appear to be turning a blind eye to the passage of sanctioned dual-use goods through the country, their counterparts in Kyrgyzstan have nominally taken steps of late to stem sanctions-violating practices.

Last fall, under pressure from the United States, Kyrgyzstan officials began requiring traders to confirm that paid-for goods will arrive in Kyrgyzstan within 60 days. The government also established a new state regulatory body to monitor the trade.

The impact of these measures is not reflected in 2024 trade data and it is uncertain whether the new rules and procedures will actually be applied. Only in 2025 will we see if these measures have had an effect, but it is confirmed that the sanctions are easily circumvented. Ultimately money rules and if someone is willing to pay money for a product, they can get it easily.


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The article From Georgia to Kyrgyzstan: the complex journey of Western cars to get to Russia comes from Economic Scenarios .


This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/dalla-georgia-al-kirghizistan-il-complesso-viaggio-delle-auto-occidentali-per-arrivare-in-russia/ on Tue, 04 Feb 2025 16:01:58 +0000.