Kyrgyzstan Liquidates More Companies Over Sanctions Risks
19 more companies have been ordered to close down, and more than 140 have been cut off by their state-owned banking partners.
Kyrgyzstan is liquidating 19 more companies in an effort to curb potential sanctions evasion on Russia, according to recent developments in the country. President Sadyr Japarov, who has previously denied any involvement in sanctioned goods reaching Russia, has shifted tactics from denial to action following pressure from the European Union.
The EU's sanctions envoy, David O’Sullivan, raised concerns about trade flows in February, suggesting some goods were being imported into Kyrgyzstan with the intention of re-exporting them to Russia. In April, the EU utilized its "anti-circumvention tool" against Kyrgyzstan, restricting the sale, supply, transfer, or export of specified sanctioned goods and technology to third countries believed to be at high risk for sanctions evasion.
This included machining centers and communications technologies. As a result, Kyrgyzstan began to show compliance, announcing the closure of 50 companies involved in operations with high sanctions risks in May. The government appointed a special representative for sanctions policy and minimized sanctions risks in June. By early August, the government had identified 40 companies associated with increased sanctions risks, with 19 ordered to liquidate by August 18.
The real test will be in the trade data, as Kyrgyzstan's actions will need to be verified through EU's decision-making process to ensure effectiveness in preventing the flow of dual-use goods to Russia.
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