Several European Union (EU) countries have been bypassing sanctions on Russia by purchasing critical commodities through third countries, according to reports by the Financial Times. The report highlights the case of commodity trading giant Glencore, which reportedly bought 5,000 tons of copper sheets from Russia’s Ural Mining and Metallurgical Company (UMMC) this year. The copper sheets were exported from Turkey to Italy’s Port of Livorno in July.
Although there is no outright ban on trading Russian metals, certain restrictions have been imposed on Russian businessmen and metal producers as part of Western sanctions. Last year, the UK and EU placed sanctions on UMMC executives, while the US introduced wider restrictions on the company itself in July. Glencore, however, stated that there is no suggestion it has breached any sanctions and that the shipment was the final part of a contract that was in place before the start of the Ukraine conflict. The company also emphasized that it has undertaken no new business with UMMC since then.
The dependence of European countries on Russia for critical commodities is magnified by the involvement of Turkey as a transshipment hub. The Financial Times noted that Turkey has seen a significant increase in imports of Russian copper, with figures showing that imports nearly tripled to 159,000 tons in the first seven months of this year compared to the same period in 2022. Moreover, Italy has emerged as Turkey’s largest export destination for copper, suggesting that it has become an integral part of the trade route for Russian copper within the European Union.
These trading patterns through third countries are causing concerns among European officials, who worry that they undermine the effectiveness of Western sanctions on Russia. The Financial Times report also highlights Dubai as another location where middlemen facilitate the importation of Russian commodities into Europe.
The data presented in the report underscores the continued reliance of EU countries on critical commodities from Russia, despite the imposition of sanctions. The report suggests that the existing restrictions have not succeeded in significantly reducing the EU’s dependency on Russian resources. European officials are grappling with the challenge of formulating effective measures to prevent such indirect trading routes, which may hinder the intended impact of sanctions.
It remains to be seen how European regulators will respond to these revelations. The issue raises questions about the broader effectiveness of sanctions and the need for closer scrutiny of trade routes involving third countries. The implications of this reliance on Russian commodities go beyond economic concerns and touch on geopolitical matters and the potential influence that Russia can wield over European countries through its commodity exports.
As the EU continues to grapple with its dependency on Russian commodities, it may be necessary to explore alternative sources and diversify supply chains to reduce this reliance. European governments and businesses need to carefully consider the economic and political risks associated with such heavy dependency on a single source for critical commodities, particularly from a country subject to international sanctions.