Tightening loopholes: Russia finally sees sharp drop in restricted industrial imports propping up its military-industrial complex

Turkey and Cameroon topped the list of countries with the largest growth in exports to Russia in 2024, and Gabon came in at an unexpected fourth overall. Export patterns varied widely: Cameroon, Gabon, Uganda, and Haiti exported specialized aviation equipment from CFM International and International Aero. Turkey became a key route for a wide range of goods, including metal-cutting machines (from Germany, Japan, and Taiwan), deep drilling equipment, and chemical flow control systems. The UAE emerged as a general-purpose hub for industrial equipment of all kinds.

Certain countries contributed mainly through single brands. Lithuania shipped only Italian Nuovo Pignone machinery, Sri Lanka supplied Honeywell aviation equipment, the Netherlands and Hungary sent GE Hungary energy systems, the Maldives exported aviation products from Pratt & Whitney, and Vanuatu supplied equipment made by South Korea’s Smart Machine Tool.

And of course, these data cannot tell the full story of sanctions evasion. Some shipments can be easily concealed — for example, small but high-value components like microchips can be smuggled in suitcases without customs declarations.

Why imports are falling — and how the West could tighten controls

By 2024, trade restrictions — through both embargoes and corporate policies — had led to a more than tenfold decline in official imports of industrial equipment from the democratic world into Russia. Excluding clearly civilian-use items like aircraft engines and power generators, the drop is even more dramatic.

Several factors explain the reduced imports via Kremlin-friendly countries:

1. Shrinking funds for capital goods: more of Russia’s foreign currency revenues are being used to import consumer goods from China and Turkey, helping to keep inflation in check.
   
   
2. Stockpiling and modernization: many production facilities were modernized by 2023 and can operate using equipment already in service.
   
   
3. Tighter sanctions enforcement: manufacturers are increasingly vigilant in enforcing export bans.
   
   
4. Growing risk aversion: China and other third countries are becoming more hesitant to export equipment to Russia, while Chinese banks are increasingly reluctant to process related payments. Only EAEU countries continue to show growth in this area, largely due to the relative ease with which they can facilitate covert transactions.
   
   
5. Smuggling of small items: high-value goods such as electronic and optical components are now often smuggled without being declared.

In the current climate, when not resorting to outright smuggling, Russia’s military-industrial complex is likely spreading procurement across exotic jurisdictions, where nascent local industries can serve as cover.

Countries observing sanctions could further tighten controls by securing broader participation from Japan, South Korea, and Taiwan in embargo coordination and enforcement monitoring, increasing moral and reputational pressure on the few remaining corporations whose products regularly surface in Russia, and applying sanctions equally to Russia and EAEU countries in order to block re-export channels.

The EU, in particular, could introduce a “long-arm jurisdiction” model (similar to the U.S.), allowing it to impose secondary sanctions on Chinese banks for re-exporting European (not just American) goods.

This report does not analyze specific suppliers or buyers — unlike manufacturers — because after three years of war, the market has shifted almost entirely to small and mid-sized intermediaries. Cases of Russian production facilities directly importing goods have become rare. Resellers are cheap and easy to establish or shut down, meaning the list of intermediaries is in constant flux.