Can Moscow Use Non-Russian Republics to Break Sanctions Regime – And Can They Use This against Moscow?

Paul Goble

            Staunton, October 13 – Moscow commentators and presumably Moscow officials are delighted that a group of Italian businessmen have travelled to the capital of the Republic of Kalmykia in order to explore joint projects that could allow them to participate in import substitution and break through the sanctions regime.

            But if Moscow can use its non-Russian republics in this way, there is the very real possibility that the republics will use any success they have as a way of building up their own status and pressuring the central authorities to make concessions to them for their “contribution” to the Russian economy.

            Even when there was no sanctions regime, the non-Russian republics within the Russian Federation that succeeded in developing trade ties with the outside world invoked that achievement in their negotiations with Moscow; and consequently it was often the case that what the central government won on the one hand, it often lost on the other.

            Today’s “Nezavisimaya gazeta” carries an article by Andrey Serenko entitled “Kalmykia Breaks the Sanction Regime” in which the paper’s correspondent in Elista observes that what has occurred in that Buddhist republic in the steppe could be repeated in other republics of the Russian Federation (ng.ru/regions/2016-10-13/5_kalmykia.html).

            According to experts with whom Serenko spoke, “European companies are testing a technique of end running the sanctions regime which has interfered with their cooperation with Russia,” something Moscow will be pleased by and the West not at all but that may matter most of all for the non-Russian republics.

            Kalmykia head Aleksey Orlov said of his meeting with the Italian businessmen that “European companies will seek ways of going around the sanctions regime, including through increasing cooperation with Russian regions. Today we see this already in the case of Kalmykia.”

            While in Elista, the Italian businessmen proposed a new form of cooperation with local officials and businesses, one that would shift from “’made in Italy’” to the notion of “’made with Italy,’” an indication that both sides see this as a way of passing under the radar screens of the sanction regime.