From Silk Roads to Backdoors: EU sanctions evasion in Central Asia

Restrictive measures

Unilateral coercive measures, otherwise known as sanctions, have long been a tool of economic statecraft, from the liberal internationalism of the interwar period to the war in Iraq in the 1990s, as Nicholas Mulder remarks in his book The Economic Weapon. For the European Union, sanctions have been the go-to coercive policy in response to Russia’s invasion of Ukraine – and their reach has now extended to Central Asia.

The EU’s recent 19^th package of sanctions delivered measures to sever Moscow’s connective tissue from global finance and trade, particularly in cryptocurrencies. Among those sanctioned financial institutions are Dushanbe City Bank, Spitamen Bank and Tajikistan Commercial Bank in Tajikistan; Tolubay Bank and Eurasian Savings Bank in Kyrgyzstan; and the Kazakh VTB Bank Subsidiary in Kazakhstan, shown on the map. The US and the UK sanctioned these same banks two months prior, in August 2025. Other measures in the EU’s package further targeted Russian liquefied natural gas (LNG) and hydrocarbons, and its shadow fleet of oil tankers.

Re-routing import and export corridors

Sanctions rewire trade rather than changing political outcomes. Restrictions on Russian imports and financial access have pushed EU and US goods into indirect channels, routed through Central Asia and the Caucasus and settled via third-country banks outside Western financial systems.

Kazakhstan has facilitated parallel imports through customs loopholes and banking flexibility, whereas Kyrgyzstan has emerged as a critical logistics hub linking China to Russia. Military products are reclassified as consumer goods, routed through shell companies and settled through third-country financial channels designed to minimize exposure to Western systems. This is particularly acute for dual-use technologies, microelectronics, car parts and luxury goods entering Russian markets from both China and Europe.

As the map demonstrates, what emerges is not a single alternative route, but rather a decentralized network built on plausible deniability. Multiple jurisdictions, interchangeable routes and fragmented supply chains provide resilience of trade flows to Russia. This adaptability is not new. It reflects a longstanding capacity of peripheral economies to adjust when centre-driven rules harden. Central Asia is accustomed to navigating between empires, as it did for centuries during the hey-day of the Silk Road.

Economic growth indicators confirm this reconfiguration: according to IMF data, growth in the Caucasus and Central Asia has remained robust in 2025, driven in part by increased trade with Russia as their economies help fill gaps created by Western sanctions. Trade flows between Russia and its neighbours, in addition to imports from the EU into the region, have expanded. Although some of this reflects outright circumvention of restrictions on specific sanctioned goods, much of it stems from broader efforts to bypass sanctions on Russian banking systems.

The EU’s geopolitical dilemmas in Central Asia and the Caucasus

The EU’s sanctions strategy illustrates a tension between ambition and control. Legally, extending sanctions to third-country actors pushes the limits of jurisdiction and infringes on their sovereignty. Economically, the extraterritorial application of sanctions increases compliance costs and can reduce regular export revenues for European businesses.

As a result, connectivity and logistics have become explicit geopolitical priorities for Europe. The EU has invested in the Middle Corridor (also known as the Trans-Caspian route) linking Europe to Central Asia via the Caucasus through the Global Gateway Initiative. This is evidence of Europe’s desire to diversify supply chains and to have a strategic presence in the region. Yet this engagement unfolds in those same spaces where sanctions evasion thrives.

Policymakers need to acknowledge this dilemma; the EU seeks to discipline Russia economically while deepening its participation in the very corridors that enable adaptation to its measures. Sanctions are reshaping incentives across Eurasia, encouraging regional states to hedge away from Europe and towards China, Turkey and Russia. In defending a fraying post-1945 rules-based order in the face of Russian aggression, the Union may be reinforcing the emergence of a more transactional, post-Western Eurasia. Sanctions remain Europe’s principal geopolitical instrument, yet their extraterritorial reach exposes the limits of European economic gravity.