$2.3 billion in dollar and euro bills have been shipped to Russia since March 2022 ban following the invasion of Ukraine,

Reuters has reported that according to customs data, it has seen.

• Around $2.3 billion in dollar and euro bills have been shipped to Russia since the United States and EU banned the export of their banknotes there in March 2022 following the invasion of Ukraine,

The customs records cover March 2022 to December 2023, and Reuters could not access more recent data.

The documents showed a surge in cash imports just before the invasion. Between November 2021 and February 2022, $18.9 billion in dollar and euro banknotes entered Russia, compared with just $17 million in the previous four months.

The previously unreported figures show Russia has managed to circumvent sanctions blocking cash imports and suggest that dollars and euros remain useful tools for trade and travel even as Moscow strives to reduce its exposure to hard currencies.

The customs data, obtained from a commercial supplier that records and compiles the information, shows cash was transported to Russia from countries including the UAE and Turkey, which have not imposed restrictions on trade with Russia.

The records did not state the country of origin for more than half the total.

The U.S. government threatened penalties in December for financial institutions that help Russia circumvent sanctions and has imposed sanctions on companies from third countries throughout 2023 and 2024.

China's yuan has overtaken the greenback to become the most traded foreign currency in Moscow, although significant payment problems persist.

Dmitry Polevoy, head of investment at Astra Asset Management in Russia, said

• Many Russians still wanted foreign currency in cash for trips abroad, as well as small imports and domestic savings.
• "For individuals, the dollar is still a reliable currency,"  

A European Commission spokesperson said

• It could not comment on individual cases of sanctions application.
• The European Union engages with third countries when it suspects sanctions are being circumvented.

Daniel Pickard, International Trade & National Security Practice Group Leader at U.S. law firm Buchanan Ingersoll & Rooney, said

• The spike in shipments before the invasion suggested that some Russians wanted to insulate themselves against possible sanctions.
• "While the U.S. and its allies have learned the importance of collective action in maximising economic consequences, Russia has been learning how to avoid and mitigate those same consequences,"
• The data almost certainly understated actual currency flows.

Russia's central bank and the Office of Foreign Assets Control (OFAC), the United States' sanctions authority, did not respond to requests for comment.

Russia started labelling the dollar and euro as "toxic" in 2022 as sweeping sanctions cut its access to the global financial system, hampering payments and trade. Around $300 billion of the Bank of Russia's European foreign reserves have been frozen.

Source

https://www.reuters.com/markets/currencies/billions-dollar-euro-notes-reach-russia-despite-sanctions-2024-08-12/