US Sanctions: Iran and China’s Oil Loopholes Exposed

2024-04-27 02:43:30

Iran and China know it, and apparently do USA: Despite the sanctions weighing on the Islamic Republic’s oil industry, Tehran is sending record volumes of crude oil to the Asian giant.

“If we believe the Chinese government, the country does not import oil from Iran. Zero. Not a single barrel. Instead, it imports a large amount from Malaysia, to the point that, according to official customs data, China buys from Malaysia twice that country produces”, explains commodity expert Javier Blas on the Bloomberg portal.

The trick to making Iranian oil Malaysian is simple, says Blas, and it plays a central role in it. United Arab Emirates. There, oil deliveries are organized and access to products that Iran is theoretically prohibited. It is the cheapest way, experts say, to avoid US sanctions. And so, as if by magic, Malaysia became China’s fourth largest oil supplier, following Saudi Arabia, Russia and Iraq.

Transshipment point in Central Asia

Russia also has transshipment points for sanctioned goods, almost without exception. You can get spare parts for German luxury cars or electronic components for weapons. The former Soviet republics of Central Asia play an important role in all this. Countries such as Kazakhstan and Kyrgyzstan have customs agreements with Russia that make cross-border movement of sanctioned goods a piece of cake.

Another example is Armenia, where sales of German cars and parts increased by a suspicious 1,000 percent last year. Since the thirteenth package of EU sanctions once morest Moscow was introduced, Russia is the most sanctioned country on the planet. Despite this, the country continues its war of aggression once morest Ukraine and the economy is far from collapsing.

The Russian bank Alfabank has been sanctioned by the West. In Kazakhstan, however, it has a strong presence. Photo: Anatoly Weisskopf/DW

Without further ado, the Russian government has just raised its growth forecast for this year from 2.3 to 2.8 percent. He The International Monetary Fund (IMF) It even estimates that growth might reach 3.2 percent. High public spending and investments in war machinery, as well as high income from oil exports, boost the Russian economy, according to the IMF.

More sanctions are coming

So why continue to impose sanctions if they do not achieve their goal? “We live in the age of sanctions. If sanctions were not introduced, it would be like giving tacit support. Or as if there was no response to this attack that violates international law,” Christian von Soest, expert at the German institute. told DW of Global and Regional Studies (GIGA).

For Von Soest, the sanctions have not led to a change in the behavior of Russia or Iran, but the US and the EU are in the process of tightening the measures. According to a report from The Wall Street JournalWashington is preparing sanctions once morest several Chinese banks to exclude them from the global financial system. The authorities want to end Beijing’s financial assistance to Russian arms production.

The EU is also working to better enforce its sanctions. Since January 2023 there has been a sanctioning officer, David O’Sullivan. – Their job is, for example, to travel to post-Soviet states close to Russia and convince them to implement stronger sanctions, explains von Soest.

– Now there is also the so-called “No Russia clause”, which will force exporters to demonstrate that goods, machines, vehicles, car parts and other items do not reach Russia, he points out.

The pressure is also increasing when it comes to the United Arab Emirates. The Financial Action Task Force (FATF), a coordinating body set up by the G7, the EU and the OECD to combat money laundering, included the UAE on a gray list, which includes the countries that FATF researchers consider to be at high risk of money laundering and terrorism. financing.

(dzc/ers)

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