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Economic Sanctions and Intermediated Trade

Author

Listed:
  • Maxim Chupilkin
  • Beata Javorcik
  • Aleksandra Peeva
  • Alexander Plekhanov

Abstract

Circumvention undermines economic sanction effectiveness, yet evidence on the precise mechanisms remains limited. This paper documents two strategies deployed to work around trade sanctions imposed on Russia in 2022: intermediated trade through Caucasus and Central Asia and a simple, yet little-documented, method whereby goods shipped through the sanctioned economy to the neighboring economies fail to reach their intended destination. The latter amounted to around half of total "abnormal" exports from the European Union/United Kingdom to Armenia, Kazakhstan, and Kyrgyzstan. While these strategies offset less than 10 percent of the sanctions' impact, substitution ratios exceed 50 percent for numerous sanctioned products.

Suggested Citation

  • Maxim Chupilkin & Beata Javorcik & Aleksandra Peeva & Alexander Plekhanov, 2025. "Economic Sanctions and Intermediated Trade," AEA Papers and Proceedings, American Economic Association, vol. 115, pages 568-572, May.
    • Handle: RePEc:aea:apandp:v:115:y:2025:p:568-72
    DOI: 10.1257/pandp.20251083
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    More about this item

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights
    • P33 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - International Trade, Finance, Investment, Relations, and Aid

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