Companies in Russia are increasingly using gold and cryptocurrencies to bypass Western sanctions, according to Yury Chikhanchin, head of Russia's Federal Service for Financial Monitoring. Creative accounting tricks and netting arrangements, which enable firms to offset debts, are being employed to minimize cross-border monetary transactions. Despite severe sanctions from the EU, Russia's economy persists and has shifted its cross-border financial activities towards regions like the Middle East, Southeast Asia, and Central Asia. This continues a trend of unconventional methods to evade restrictions imposed after the invasion of Ukraine.
Alternative payment mechanisms are being actively employed, including gold, cryptocurrencies, and, more recently, netting arrangements: clearing operations, which we are currently implementing.
Chikhanchin's unusually public disclosure of how Russia is circumventing sanctions comes over 40 months after Moscow's full-scale invasion of Ukraine triggered an unprecedented wave of Western sanctions.
Russia's cross-border payments are now flowing more through the Middle East, Southeast Asia, and Central Asia.
The country's economy continues to hum along despite 17 rounds of penalties from the European Union - once Russia's largest trading partner.
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