Russia and China are using clever tactics to circumvent Western sanctions. They disguise copper as scrap and profit from trade tariffs.
MOSCOW - Investigations have found that Chinese companies and Russian copper producer RCC disguised Russian copper as scrap to avoid sanctions. This is reported by the
Reuters
news agency , citing three sources familiar with the situation. Disguising the copper as scrap offers both Russia and China the opportunity to benefit from different trade tariffs. In addition, the crushed metal is more difficult to trace.
Sanctions against Russia's economy: How Putin is outsmarting the West
In the remote Xinjiang Uyghur region of China, copper wire rod is being shredded by a middleman to make it difficult to distinguish from scrap, according to the
Reuters
report from April 15, 2024. This is particularly explosive since the West has announced that it will stop trading with Russian Significantly restrict metal.
On Sunday, April 14, 2024, the USA and Great Britain expanded their import ban on Russian metals due to the war in Ukraine. Metals such as aluminum, copper and nickel produced in Russia after April 13 will no longer be traded on the world's two largest metal exchanges in London and Chicago, the U.S. and U.K. treasuries said. Russian metal producers would be excluded from the profits of the London Metal Exchange and the Chicago Mercantile Exchange.
Sanctions against Russia are intended to reduce Putin's source of income
The aim of these measures is to reduce Vladimir Putin's income, which he uses for his war against Ukraine. US Treasury Secretary Janet Yellen also emphasized this. The bans are intended to reduce the revenue "that Russia can generate to continue its brutal war against Ukraine." British Finance Minister Jeremy Hunt made similar comments, saying the ban on Russian metals on the two largest exchanges is intended to prevent “that the Kremlin will allow even more money to flow into its war machine.”
The USA had already imposed tariffs on various Russian metal imports and has now also banned the import of newly produced aluminum, nickel and copper from Russia. The UK has already passed a law banning the import of Russian metals in December 2023.
After announcing the latest sanctions against Russian metal, the
Bloomberg
news agency warned that Russia could now supply even more metals to China. In 2023 alone, the Russian aluminum giant United Rusal International made 23 percent of its sales in China; in 2022 it was only eight percent.
Despite sanctions against Russia: China stands by Putin
Despite the war in Ukraine, Russia and China have maintained their close economic relationship. Due to Western sanctions and the threat of economic isolation, Russia's economy is heavily dependent on China. The war in Ukraine further weakened the Russian economy.
Josep Borrell, a senior EU foreign and security policy official, expects the Russian economy to shrink due to sanctions and the impact of the war. “If the war continues, things will only get worse,” Borrell wrote in an article for the European External Action Service in early April 2024. He believes that Western sanctions are effective. The Russian economy's revenue from fossil fuel exports has halved since spring 2022, which can be attributed to EU sanctions. (bohy with material from Dpa and Reuters)