New role of outpost: Bridge of anti-sanctions

New role of outpost: Bridge of anti-sanctions - ANALYSIS

16:21 09 May 2022 Read: 1045

Following the sanctions imposed on Russia, a big move of Russian business to Armenia started. An interesting event, "New opportunities for business within the Eurasian Economic Union" was held in Yerevan on May 4. The event was organized by several organisations, primarily the Skolkovo Foundation of Russia.

The so-called format of ‘Eurasian Economic Union (EEU)’ is 'a stillborn child' and was established to organize economic expansion around Russia. Currently, methods are being sought for the migration of Russian business to adjacent countries, primarily Armenia through this format. The economic integration within EEU until 2025 was discussed during the event held in Yerevan. The main attention was paid to supporting Russian business localising in Armenia. The participants discussed mechanisms and tools in this regard.

The point is that through the relocation, most companies are opening new offices and continuing their operation in order to avoid sanctions imposed on Russia. The Russian side aims to ease legal proceedings in this context by strengthening contacts with Armenians.

The mass migration of the Russian companies to Armenia, especially working in information technology has been observed recently. The reason is that open access to the internet and global bank services is of importance in this field. While those services are blocked in Russia, there is not any restriction in Armenia. Thus, more than 500 Russian IT companies moved to Armenia in March of this year. 500 companies within a single month! It is not difficult to imagine the overall scale…

It is necessary to remember that the Main Directorate of Intelligence of the Ministry of Defence of Ukraine accused three South Caucasus countries of assisting Russia to avoid sanctions. To be honest, it is impossible to put forward any serious facts in regard to Azerbaijan and Georgia. At the very least, re-exportation of any goods through these two countries can be realised. However, when it comes to Armenia, as they say, " there are screaming facts." There is a big difference between the re-exportation and becoming a platform for business majors of the aggressor country.

The Russian companies moving to Armenia are both developing the IT sector dependent on Russia and paying taxes to the Russian budget. Western countries and institutions that impose sanctions on Russia become taunted. Currently, many large companies in the US Silicon Valley are cooperating with the Armenian IT companies, which are actually sanctioned Russian companies. If it is a feature of their two-faced policy, then it is not the case. However, if they really have serious intentions to impose sanctions on Russia, they should also be attentive to who is hiding under the name of ‘Armenian business’.

Overall, 85,000 Russian citizens have moved to Armenia since the beginning of the war with Ukraine. An important point: they moved to organize the migration of Russian business to Armenia, not to escape the war. Herein, they set up business as soon as they reached Armenia. Following the beginning of the war, 1,000 Russian-owned private companies and 250 LLCs have been established in Armenia. Indeed, it is a big migration.

According to some sources, Russia intends to produce goods in the CSTO partner state, since some goods, including military equipment are impossible to produce in Russia due to sanctions. For instance, electronics parts are not sold to Russia due to sanctions, but they are sold to Armenia or Kazakhstan! Russia will continue production by using imported parts in Armenia and transporting them to its territory. That's what it means to avoid sanctions! Besides, they kill two birds with one stone: Moscow is both fooling the West and making the CSTO economies more dependent on it. In fact, the CSTO countries are becoming Russia's workshop.

Moreover, military cargo flights between Russia and Armenia have intensified recently. They do not fly through Azerbaijan’s territory, but over the Caspian Sea and Iran. When it comes to what they carry, it is probably no longer a secret to anyone.

There is one way to overcome all this: sanctions on all products banned from sale to Russia should be applied to other CSTO members. Especially to Armenia: Russia has two military bases and 3,000 servicemen in this country, and they must act only under Moscow's will. As long as sanctions are not imposed on Armenia, Russia cannot be isolated effectively!