Russia’s Eurasian Economic Union Creates New Pathways for Potential Sanctions Evasion

As Western sanctions work to isolate Russia’s economy, Moscow is investing in trade backdoors.

The intergovernmental council of the Eurasian Economic Union (EAEU) concluded its 47th meeting with the formalization of several new agreements — providing for easier cross-border e-commerce, exchange brokerage, and recognition of credentials. The EAEU (comprising Russia, Armenia, Belarus, Kazakhstan, and Kyrgyzstan) is a trade bloc working to form a common market — the post-Soviet answer to the European Union. The agreements reached at the August 7 council meeting work to further integrate the members’ markets.

The EAEU’s open borders and minimal customs inspections enable trade to flow into Russia with minimal oversight, creating opportunities for the transit of sanctioned goods as well. Russia also aims to ensure that EAEU markets can fill part of the gap from Western market withdrawal.

In 2023, Russian Prime Minister Mikhail Mishustin labeled EAEU and partner integration a priority while declaring that “[attempts] to shut [Russia] out of the global economic space through sanctions failed.” Moscow likely hopes renewed EAEU outreach will hedge against sanctions pressure and cement Russia’s power in its perceived sphere of influence.

EAEU Integration Facilitates Illicit Transshipment and De-dollarization

The U.S. Bureau of Industry and Security has identified EAEU members Kyrgyzstan, Kazakhstan, and Armenia as jurisdictions carrying elevated risk of reexport of controlled goods to Russia. For example, between 2022 and 2025, Kyrgyz imports of specialized dual-use electronics from the European Union grew by more than 800 percent — indicating mass reexport to Russia. In March 2026, an Italian national pled guilty to reexporting more than $540,000 in U.S. ammunition to Russia through Kyrgyzstan.

Further reducing regulatory friction within the EAEU exacerbates the lack of oversight and opportunity for exploitation. Recognizing this risk, the European Union has imposed export controls on Kyrgyzstan to counter sanction circumvention through transshipment.

As about 90 percent of the $92 billion in intra-EAEU trade is settled in national currencies, the union also reinforces Russian efforts to move partners away from reliance on the dollar as an international trade baseline — a shift that is key to evasion of sanctions restricting access to the dollar-based financial system.

EAEU Jurisdictions Provide Insurance Against Ukrainian Strikes

Moscow may have prioritized the EAEU e-commerce agreement as insurance against Ukrainian strikes, though discussions likely began long before Ukraine’s recent campaign against Russia’s economic and military-adjacent infrastructure. In 2026, Ukraine has targeted Russian online marketplace Wildberries, an Amazon equivalent that over half of Russia’s population uses monthly. Ukrainian drone strikes on 23 warehouses in less than three weeks have driven conversations about drone attack insurance and the relocation of logistics and warehouses abroad. As the EAEU smooths pathways for transnational e-commerce, Russia may outsource growing volumes of e-commerce, using its neighbors as safe havens from Ukrainian strikes and as protection for its economy.

Ukraine also claims that it targets Wildberries for providing nonlethal military equipment to Russian soldiers. Until the wave of Ukrainian strikes, Wildberries featured a shopping tag “Everything for the SVO” — using Russia’s “Special Military Operation” terminology for the war — that listed more than 200,000 military products, such as helmets and bulletproof vests.

To Impact Russia, the U.S. Must Address Moscow’s Networks

The United States should treat new agreements reached within the EAEU as red flags for potential new Russian tactics to avoid Western economic pressure. Washington should prepare to designate problematic networks for sanctions as soon as they emerge. The United States should also consider replicating the European Union’s tool for countering sanctions evasion — adopting export controls on high-risk dual-use goods sent to countries likely to reexport these items to Russia.

The United States must also continue to emphasize sanctions-evasion concerns at high-level talks with EAEU members — including talks about proposed resource and infrastructure investments. Should Congress elect to increase the number of Bureau of Industry and Security officers stationed at embassies abroad to support U.S. export-control enforcement, the Department of Commerce should strongly consider deploying a representative to Kazakhstan. This officer would conduct end-use inspections to ensure U.S. exports are received by an appropriate party and would serve as an on-the-ground touchpoint to advise on, scrutinize, and critique regional export controls.

Angela Howard is a research analyst at the Center on Economic and Financial Power (CEFP) at the Foundation for Defense of Democracies (FDD), where Emilia Marshall is an intern. For more analysis from the authors and FDD, please subscribe HERE. Follow FDD on X @FDD and @FDD_CEFP. Follow Angela on X @angela__howard. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.