Kyrgyzstan shuts down companies suspected of helping Russia evade sanctions

Kyrgyzstan, a landlocked mountainous nation in Central Asia and one of the region’s poorest economies, relies heavily on remittances from migrant workers. But four years ago, its fortunes took an unexpected turn.

After Western governments and allies imposed sanctions on Russia for its 2022 invasion of Ukraine, Kyrgyzstan swiftly became a hub for transshipping goods to bypass the embargo. From 2021 to 2022, the value of Kyrgyzstan’s annual exports to Russia surged from $393 million to $1.07 billion, including luxury cars and microchips.

Some items, such as microchips, are classified as “dual-use”—imported into third countries like Kyrgyzstan as civilian goods, then re-exported to Russia, where they can be used in military equipment such as missiles and drones.

Last week, Kyrgyzstan’s government announced that 50 companies suspected of helping Russia evade sanctions would be forced to cease operations. The announcement came weeks after the European Union (EU) imposed an embargo on certain electronics exports to Kyrgyzstan for diverting these products to Russia. This marks the first time the Central Asian nation has taken such a step.

Last year, the EU blacklisted two Kyrgyz banks, while the United Kingdom imposed sanctions on senior Kyrgyz officials.

“It’s an open secret in Kyrgyzstan that entrepreneurs and companies are profiting from international and Western sanctions on Russia by helping Russia circumvent them,” said Erica Marat, a Kyrgyz scholar at the College of International Security Affairs, speaking to Al Jazeera.

“I know some individuals—though they disagree with and are horrified by what Russia is doing in Ukraine—still trade with Russia, viewing it as an opportunity, saying if they don’t do it, someone else will… So closing these companies is not about moral judgment of Russia’s actions. It’s purely out of fear of being punished as a sanctions violator.”

As part of the Soviet Union, and earlier the Russian Empire, Kyrgyzstan has depended on Moscow for over a century. Since gaining independence in 1991, its economy and politics have been deeply intertwined with Russia.

“Kyrgyzstan holds geopolitical significance for Moscow. It is seen as a buffer against the spread of extremist Islamism, especially amid Tajikistan’s civil war and the Taliban’s rise in Afghanistan,” said Mikhail Krishtal, an associate professor at Immanuel Kant Baltic Federal University in Kaliningrad and a member of the Moscow-based Digoria Expert Club. “These circumstances largely shaped Moscow’s military-technical and financial support for Bishkek during that period.”

Russia and Kyrgyzstan have an “asymmetric” trade relationship, Krishtal added. Russia is a key market for Kyrgyz goods, while remittances from Russia account for 15 to 26 percent of Kyrgyzstan’s GDP, depending on estimates.

“Equally important is Kyrgyzstan’s membership in the Eurasian Economic Union (EAEU), which grants its citizens significant benefits that migrant workers from neighboring Tajikistan and Uzbekistan lack, even as Russia tightens migration policies,” Krishtal noted.

Despite recent sanctions, the current Kyrgyz government maintains close ties with Moscow. Russia operates an airbase and other military facilities in Kyrgyzstan, and the two countries have signed joint defense agreements.

“Kyrgyzstan has had six presidents since independence, but each has been extremely loyal to Russia, especially to President Vladimir Putin,” Marat said. “The government is largely within the Kremlin’s orbit. In a way, they don’t really have a choice whether to support Russia. There isn’t enough room to maneuver—unlike Kazakhstan or Uzbekistan, which increasingly rely on Western interests and their mineral wealth, or China, which is interested in trading with them.”

While the Kyrgyz public generally supports Russia, not everyone is satisfied with the Kremlin’s influence.

“It’s sad—the political situation here has worsened over the past few years, and now we’ve become very much like Russia,” said Khadija, a Bishkek resident in her twenties and a volunteer at an NGO, who requested anonymity. “A few years ago, if we pushed hard enough, politicians would listen. But now, I really don’t know what we can do—things are heading in the opposite direction. I don’t know how much Russia influences Kyrgyzstan, but it’s the same script: foreign representatives, etc.”

Surrounded by neighbors often described as authoritarian, Kyrgyzstan was once seen as the most open, though politically unstable, country in Central Asia, with free speech and democratic elections. However, under President Sadyr Japarov, press freedom has declined, with the investigative website Kloop blocked and journalists arrested. A “foreign agent” law similar to Russia’s has passed, curtailing NGO activity, while Japarov’s executive powers have expanded at the expense of parliament.

Another point of contention is history. At a Moscow conference in May, Russian historians asked their Kyrgyz counterparts to stop using the term “colony” to describe Russian rule in the late 19th and early 20th centuries. Meanwhile, some Kyrgyz historians have long viewed Russian actions as akin to European colonial powers—for instance, the brutal suppression of the 1916 Urkun uprising, which killed tens of thousands of Kyrgyz and Kazakhs, either at the hands of the Imperial Russian Army or during escapes over mountains to China.

“We see a growing diversity of views and grievances, and the grievance is about Russia’s continued influence in Kyrgyzstan, from intellectual elites to activists and younger generations, who do not see Russia as a positive partner and tend to view Russian dominance—including during Soviet and Tsarist times—as colonialism that destroyed Kyrgyz culture and identity. These voices are getting louder,” Marat said. “After the full-scale invasion of Ukraine and the subsequent atrocities, this grievance has spilled into mainstream and become the dominant discussion in non-governmental circles.”

Russia is not the only power interested in Kyrgyzstan, which sits on the ancient Silk Road. Russian Deputy Foreign Minister Mikhail Galuzin recently told Izvestia that the West—specifically the U.S., UK, and some EU countries—is seeking access to the region’s resources to undermine Russian influence in Central Asia by pushing a narrative of the “Russian threat.” Another major player is China, which borders Kyrgyzstan to the east. “Kyrgyzstan’s economic partnership with China has expanded significantly in recent years,” Krishtal said. “This has led to a substantial increase in trade turnover, Bishkek’s participation in the Belt and Road mega-logistics project, and a rise in Chinese investment. In this context, Kyrgyzstan’s significant debt dependence on China is noteworthy: this situation could lead to China gaining economic concessions in the country.”