Russian Sanctions Will Prove Toothless Thanks to Russian Allies}

Imagine a trade war or foreign policy confrontation in which one European nation was to be sanctioned. That sanction would be simple to circumvent. As all EU countries are in a common customs alliance, the targeted country would simply channel imports, exports, and the flow of finance via a neighboring EU state. The impact would be a brief period of awkward and momentarily painful transition, leading to a new normal accompanied by mild logistical inconvenience.

One of the West’s fatal delusions is that Russia is isolated and has no EU-like alliances on which it can call – other than with the transparently subservient state of Belarus. Not so. The little-known EAEU (Eurasian Economic Union), whose five member states are Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia, represents an almost complete mirroring of the institutions and arrangements of the EU. Its Moscow-based Eurasian Commission is modelled on the European Commission; Minsk hosts the EAEU’s Court; the Union’s core objective is the development of a single market and the achievement of the ‘four freedoms’ – goods, capital, services, people – which are the pillars on which the EU project rests; its leaders have openly advocated a currency union. There is a Eurasian Development Bank, a Eurasian Open Skies project, a common external tariff on goods entering the Union, and – above all – a Eurasian Customs Union.

In only one respect is this grouping notably different from the EU. While a common defense strategy remains a distant European dream, the EAEU’s five members, together with Tajikistan, also constitute the Collective Security Treaty Organization (CSTO), a military alliance which replicates NATO’s pledge that ‘an attack on one is an attack on all’. Until now, despite calls from member states for CSTO intervention to help quell episodes of purely domestic unrest (notably in Kyrgyzstan in 2010), the organization has held back. This year that changed. In January 2022, for the first time CSTO deployed ‘peacekeeping’ military forces in response to civil unrest. This action in Tajikistan set a precedent for interpreting internal dissent as an external attack – and sending in the troops.

Right now, the prospects of Russia invoking the collective forces of the CSTO in support of its Ukraine ‘operation’ may seem remote – although doubtless a roadmap of false flag incidents and/or the incorporation of Ukraine’s breakaway Eastern ‘republics’ into the CSTO has been thoroughly war-gamed in the Kremlin. The prospects of the EAEU mobilizing as a sanctions-busting force to crack open Biden’s ‘wall of strength’ is far from remote. It’s already happening.

Armenian leaders have been taking to the airwaves to boast how many Russian businesses are hopping over to Yerevan to take advantage of the EAEU’s single internal market and customs union. The country’s Economy Minister has boasted that “about a dozen companies have already effectively relocated, while several others are on their way,” adding that the Armenian Ministry of Economy has already set up a working group tasked with facilitating the relocation of Russian entities. It’s easy to see why Armenia has become Russia’s go-to solution for getting around the West’s economic blockade.

Of the four non-Russian members of this Union, the country boasts the deepest links with the West. As a Christian nation with a huge, wealthy and politically active diaspora in both the EU and the USA, these links exist on every level: economic, political, and cultural. And cash-strapped Armenia seems only too delighted to welcome wealthy interests from its northern ally, with little apparent thought for the potential risks to its own relations with the West.

As yet, only a few western commentators have pointed out this fatal flaw in the much-praised sanctions program. As recently as May 2021, the UK’s Chatham House published an article aimed at ‘exploding the myth’ that the EAEU is a ‘meaningful economic project’. Recent developments demonstrate how dangerous it is to ever underestimate this – or any other – Russian-backed project. Organized Crime and Corruption Reporting Partnership (OCCRP) co-founder Drew Sullivan spelled out the problem in an unambiguous tweet: “You cannot just sanction Russia – you must similarly sanction ALL members of the customs union including Kazakhstan, Kyrgyzstan and Armenia. Russians can import anything they need through those countries with no borders or barriers.”

The message for the West is clear. If governments want sanctions to be effective, this loophole must be closed. We cannot force the dissolution of the EAEU. But we can, and must, extend the full weight of sanctions against all its member states, starting with Armenia. For some key Western alliance states, notably France and the US with their disproportionately influential Armenian diasporas, this will doubtless be unpalatable. The alternative is unthinkable.