Report: 2024 is the year to defund Russia’s war: The West holds the key
Two years after the start of Russia’s all-out war on...Ukraine is still resisting as Russian attacks continue to destroy infrastructure and human lives. The flow of Russia’s fossil fuel revenue combined with corporate taxes paid by foreign companies and the supply of western military tech can explain Russia’s ability to continue to wage war and further militarize. The imposition of sanctions by the EU, the US and other G7 states have constrained its economy, but Russia found ways to evade and circumvent sanctions. Closing the existing sanctions loopholes and issuing guidance on the risks of remaining in Russia for the non-sanctioned businesses are of paramount importance to defunding Russia’s war machine. Further actions by the West are the key to crippling Russia’s capacity to wage war in 2024 and beyond.
Since its inception in July 2022, the B4Ukraine Coalition of over 80 civil society organizations globally has been working to persuade governments and companies to defund Russia’s illegal war. Jointly with our members, B4Ukraine has focused our efforts on promoting robust sanctions on the oil and gas as well as the weapons sectors, while also calling on the remaining foreign businesses operating in Russia to protect human rights and exit the market of the aggressor state.
This report summarizes B4Ukraine’s collective and individual members’ contribution to our shared goals and recommends urgent imperatives and further actions...
Russia’s Military & Industrial Complex
- Despite introduced export controls, Russia continues to import large quantities of critical military goods. In the first ten months of 2023, it received $8.8 billion ($8.2 billion) worth of the so-called “high priority battlefield items,” according to a recent Kyiv School of Economics (KSE) report.
- A staggering 95% of all foreign parts found in Russian weapons on the battlefield were sourced from producers in the coalition helping defend Ukraine, with 72% accounted for by US-based companies alone. Jointly, Analog Devices and Texas Instruments accounted for almost 30% of all foreign components identified by Ukrainian authorities in missiles, drones, and tanks found on the battlefield.
- The fact that Russia still acquires advanced technology from the West signals its inability to do so domestically or with the help of China. This provides the coalition countries with significant leverage to close the existing export control loopholes.
- Western CNC1 Machine tools remain the backbone of Russia’s military production as there is not a single Russian tank or plane that does not have parts made with foreign-made CNC machines. In 2023, Russia imported 33% more CNCs than in the previous year. Germany (42.3%), South Korea (20.7%), Taiwan (19.5%) were the top three suppliers, collectively accounting for over 82%.
Policy Recommendations for Governments and the Private Sector
• Incentivize robust human rights and end-user due diligence by the private sector of coalition countries
• Target third-country intermediaries
• Align and expand dual-use goods lists
• Criminalize sanction violations in all coalition jurisdictions...