More than two years have passed since the onset of the sanctions war between Russia and the EU, leading to a significant withdrawal of European brands from Russia. However, global brands that initially decided to exit the Russian market in early 2022, in solidarity with Ukraine, have since adapted to the sanctions regime. They have learned to circumvent the anti-Russian restrictions imposed by the US and the EU without formally violating them. For example, the French tire company Michelin has mitigated the loss of the Russian market by increasing its sales in the Middle East, as well as in smaller and Central Asian countries.
It’s long been an open secret that countries from the former Soviet Union actively re-export sanctioned products to Russia through unofficial channels. Additionally, Turkey and the United Arab Emirates—countries that did not join the Western sanctions against Russia and are major beneficiaries of the sanctions war—are actively involved in bypassing these sanctions. The profits from these gray exports go to local businessmen. Whether these businessmen share the profits with top managers in Western companies, who overlook the unexplained sales growth in remote regions, remains unknown.
For instance, TATKO T.A.S., a Turkish Michelin dealer, achieved record profits in 2023, exporting approximately $61 million worth of French tire products to Russia via intermediaries in third countries in just the first half of the year. Turkish businessmen use shell companies in free economic zones and Central Asian countries to obscure the supply sources and confuse sanctions monitoring services. TATKO T.A.S. specifically uses subsidiaries KAZ T-REMA International (Kazakhstan) and DTO TYRE FZCO (United Arab Emirates).
According to customs database excerpts provided to the Berliner Telegraph by insiders from the customs authorities of Russia and EU countries under the condition of confidentiality, deliveries of French Michelin tires by DTO TYRE FZCO are processed in transit through a Latvian intermediary company on behalf of the Russian company Neftegazpostavka LLC, which purchased nearly $170,000 worth of products from DTO TYRE FZCO in 2023. For comparison, in 2021, before the sanctions, Neftegazpostavka bought about $174,000 worth of Michelin tires solely from Michelin North America Inc. The complex logistical chain from France to UAE, Latvia, Kazakhstan, and then to Russia makes it extremely difficult to trace all connections and identify the final recipient.
French companies that have officially left the Russian market might not be aware of how their EU-sanctioned products are reaching Russia. However, considering that the current Vice President of Michelin, Manuel Montana, led the Turkish branch of the company from 2016 to 2019 and likely had close working relationships with the Michelin dealer in Turkey, TATKO T.A.S., it is hard to believe in such ignorance.
In any case, the EU countries’ sanctions regime against Russia can only loosely be termed a real sanctions regime. If there is a demand for products, they will find their way through global supply chains, even to prohibited markets, in the 21st century. It is challenging to condemn companies for exploiting loopholes and gaps in international legislation to maximize their profits.
Ultimately, these companies need to pay wages to employees, dividends to shareholders, and taxes to the state. This is the foundation of the capitalist economy of the liberal West.
Media info:
Name: Aleksandr Boyko
email: info@berliner-telegraph.de
Company name: Berliner Telegraph
Tel.: +49 159010465502
