Some Russian banks may have skillfully navigated around a ban on shipping dollars and euros into the country by engaging in gold trade with the United Arab Emirates and Turkey, according to research from financial intelligence firm Sayari. The report indicates that despite sanctions on banknote exports imposed after Russia’s invasion of Ukraine, certain financial institutions, including Lanta Bank JSC, managed to import over $82 million worth of euros, dollars, and UAE dirhams in the first quarter of 2023.
While Bloomberg couldn’t independently verify all the trade and company data, Sayari’s findings suggest that these banks may have continued the gold-for-cash strategy until at least July or August of the previous year. The data also points to an expansion of gold deliveries to Hong Kong, alongside the UAE and Turkey.
Sayari compiled the information on Russian trade from bills of lading, revealing that several entities engaged in shipping cash to Russia also imported gold from the country during similar timeframes. The report highlights a network of intermediaries facilitating these apparent circular trades, without revealing the ultimate recipients of the currencies or their potential ties to sanctioned Russian entities.
Facing a shortage of dollars and euros due to restrictions from the western financial system, Russian banks may have adopted this tactic to facilitate imports and transactions. The strategy gained prominence following EU and US restrictions on Russia’s access to western currencies as part of the sanctions imposed in response to the Ukraine conflict.
As the world’s second-largest gold producer, Russia mines over 330 tons annually. However, sanctions on miners and lenders led to a decline in shipments to hubs like London and New York. The country adapted by increasing domestic sales and exploring alternative export routes, with Turkey, the UAE, and later Hong Kong becoming significant hubs.
Since the end of 2023, scrutiny on transactions linked to Russia has risen in the UAE, Turkey, and China, in a bid to avoid violating US sanctions. Notably, these jurisdictions have also served as conduits for Moscow to bypass trade restrictions on key technologies imposed by the EU and the US, such as advanced chips used in Russia’s weapon production.
