EU Exports to Russia Down to 37 Percent of Prewar Level

Since the start of the war in Ukraine in spring 2022, EU exports to Russia have fallen to 37 percent of their prewar level. “One reason for the still high volume of exports to Russia is that only 32 percent of all products from the EU are subject to sanctions. In the case of luxury goods, for example, there are sanctions against exports of champagne to Russia, but not of prosecco,” says Feodora Teti, Deputy Director of the ifo Center for International Economics. In addition, it is possible to deliver many of EU goods subject to sanctions to Russia indirectly via third countries, as evaluations of the new ifo sanctions database suggest.

Due to export restrictions imposed by the EU and other Western countries, Russia is lacking around one-third of products under sanction compared to the prewar period. China is Russia’s most important alternative country of origin for products under sanction: 61 percent of all products subject to sanctions come from China; in 2021, the proportion was only 35 percent. Turkey is Russia’s source for 13 percent of all products on which the West has imposed sanctions; in 2021, this figure was just under 3 percent. Russia is currently also purchasing a small proportion (around 1 percent) of all goods under sanction from Armenia. In the same period, exports from the EU to Armenia have doubled. “In the case of China, the increase in exports to Russia can at least partly be explained by stronger domestic production. When it comes to Turkey and Armenia, however, the sudden and sharp increase in exports to Russia suggests that sanctions are being circumvented,” Teti says.

Questions can be directed to: Dr. Feodora Teti, 0049 / 89 9224 1389, Teti@ifo.de

This report was commissioned by the German Federal Ministry for Economic Affairs and Climate Protection. The views expressed in this report are those of the authors and do not necessarily represent the views of the Federal Ministry of Economic Affairs and Climate Protection or the Minister.