Around $2.3 billion in U.S. dollar and euro banknotes have been transported to Russia since March 2022, despite Western sanctions banning such exports, according to customs data obtained by Reuters. These previously unreported figures highlight how Russia has managed to sidestep restrictions, maintaining access to foreign currency even as it seeks to reduce its dependency on hard currencies amid ongoing economic isolation.
The data, sourced from a commercial provider that tracks and compiles customs information, reveals that cash was shipped to Russia from various countries, including the UAE and Turkey, which have not imposed trade restrictions on Russia. However, the origin of over half of the total shipments was not specified in the records.
In response to Russia’s circumvention efforts, the U.S. government in December warned financial institutions of potential penalties for aiding Russia in bypassing sanctions. Throughout 2023 and 2024, the U.S. has also imposed sanctions on companies from third countries involved in these activities.
Although China’s yuan has surpassed the U.S. dollar as the most traded foreign currency in Moscow, significant payment challenges persist. Nonetheless, many Russians continue to rely on foreign currency, particularly U.S. dollars, for international travel, small imports, and domestic savings, according to Dmitry Polevoy, head of investment at Astra Asset Management in Russia.
“For individuals, the dollar is still a reliable currency,” Polevoy told Reuters.
Despite the sanctions labelling the U.S. dollar and euro as “toxic” in 2022, Russia has continued to navigate around these restrictions. The sanctions have severely restricted Russia’s access to the global financial system, with around $300 billion of the Bank of Russia’s foreign reserves in Europe being frozen.
A European Commission spokesperson declined to comment on specific sanctions cases but noted that the European Union engages with third countries when it suspects sanctions are being circumvented. The customs records reviewed by Reuters cover the period from March 2022 to December 2023, with more recent data unavailable.
The documents also revealed a significant surge in cash imports just before the invasion of Ukraine. Between November 2021 and February 2022, $18.9 billion in U.S. dollar and euro banknotes entered Russia, compared to just $17 million in the preceding four months.
Daniel Pickard, leader of the International Trade & National Security Practice Group at U.S. law firm Buchanan Ingersoll & Rooney, said the pre-invasion spike indicated that some Russians were preparing for potential sanctions.
“While the U.S. and its allies have learned the importance of collective action in maximizing economic consequences, Russia has been learning how to avoid and mitigate those same consequences,” Pickard said, adding that the reported figures likely underestimate the actual currency flows.
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