Revealed: The Secret To Buying Russia’s Top Arms While Avoiding US Sanctions
Don’t tell the Treasury Department.
Key point: It’s all about the third party.
Russia may have found a neat trick to evade U.S. sanctions that bar countries from buying weapons from Russia.
Customers reselling Russian weapons to a third nation will simply not officially notify Russia about the sale.
“The new decree relaxes export control rules that required secondary arms buyers to inform Russia in writing that it was the final buyer,” according to the Moscow Times. “These countries can now avoid direct contact with Russia by making the primary arms buyer responsible for informing Moscow that the secondary buyer vows not to resell the weapons.”
In other words, Russian arms can be resold to a third party, with the reseller avoiding contact with Moscow and thus potentially being penalized by U.S. sanctions.
The change was sparked by the U.S. government’s 2017 Countering America’s Adversaries Through Sanctions Act, or CAATSA, according to Russian news publication Vedemosti. Among the law’s provisions are bans on transactions with Russia’s defense or intelligence sectors. “Foreign states express interest in buying Russian military products, but fearing to be subject to sanctions, refuse to purchase it,” complained the Russian government decree authorizing the new arms transfer arrangements to bypass CAATSA.
And that’s bad news for a sagging Russian economy. “Export is the most important component of the revenues of the Russian defense complex,” noted Vedemosti. “Since 2013, annual arms sales amount to $15 billion to $16 billion.”
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