Kyrgyzstan is ready to challenge the EU in court if the bloc imposes sanctions on the Central Asian state over its alleged exports to Russia, a senior minister said, in the first major test of Brussels’ ability to prevent key equipment leaks through its sanctions regime.
The European Commission has proposed a ban on the sale of certain goods to Kyrgyzstan that could have military purposes, as Brussels claims Kyrgyz companies are breaking sanctions by re-exporting them to Russia, according to documents seen by the FT.
But Daniyar Amangeldiev, first deputy chairman of the Kyrgyz Cabinet, told the FT that the former Soviet republic is working hard to comply with Western sanctions. He said Brussels has not outlined what steps Bishkek could take to demonstrate its compliance and avoid sanctions.
“This decision will affect our image. If such a decision is made, we will be ready to challenge it in court,” he said, adding that Kyrgyzstan “has evidence that we have taken action”, while Brussels has “not proposed any appropriate mechanisms for us to comply with”.
“There must be rules to follow. If the rules are not formulated, how can we adhere to them?” he asked.
According to the EU documents, Kyrgyzstan exports so-called dual-use goods, such as machine tools and electronics used in weapons and drones. Any ban would be the EU’s first secondary sanction against a country and the first use of its anti-circumvention powers.
According to the documents, Kyrgyzstan’s imports of common high-priority products from the EU have increased by almost 800 percent since Russia’s large-scale invasion of Ukraine in 2022. Meanwhile, the country’s exports to Russia are up 1,200 percent, the documents said, indicating “a persistent and particularly high risk of circumvention.”
Amangeldiev said much of the import growth was due to a handful of very large, high-value deals with European countries, for example to build hydroelectric power stations in the country.
He acknowledged cases of goods passing through Kyrgyzstan and ending up in Russia, but said the country was committed to preventing this. As a result, he argued, sanctions should continue to target individual violations and not the country as a whole.
“We are not in favor of adding fuel to this conflict. That is why we are categorically opposed to the trade in goods that are banned,” Amangeldiev said. He said Bishkek had shared a package of documents with the EU in February detailing its efforts, but Brussels had not explained, for example, how to clear the names of sanctioned Kyrgyz banks.
Western capitals have accused Kyrgyzstan of helping Russia circumvent restrictions on its financial sector and have imposed sanctions on several entities, including the Kyrgyz issuer of a ruble-pegged stablecoin with very high transaction volumes.
EU officials say Bishkek has repeatedly given assurances that it has tightened controls, but enforcement is lacking.
EU sanctions envoy David O’Sullivan has been in talks with the Kyrgyz government for several months. While visiting Bishkek on Thursday, he told reporters: “We are not asking Kyrgyzstan not to have trade relations with Russia. We only ask that that trade relationship does not involve deliberately circumventing our sanctions.”
The EU’s 20th package of sanctions was blocked by Hungary after Kiev stopped supplying oil through the Russian-damaged Druzhba pipeline.
Adding country-level sanctions to these measures was intended to demonstrate that the EU is serious about taking action. However, it will not be without costs, says Lina Aburous, sanctions expert at consultancy Forward Global in Brussels.
“The EU is not prepared for retaliation,” she said, arguing that the EU should instead encourage countries to cooperate. “It must offer alternatives, such as better market access.”
Amangeldiev said country-level sanctions would seriously damage Kyrgyzstan’s reputation and hinder its development.
“We are a relatively small economy overall and we cannot afford such an image,” he said.
The country’s economy is focused on trade, he added. “We are a cross-border country. We are, so to speak, at the crossroads of the historic Silk Road,” he said.
The country has also been dependent on Russia for a long time. A significant part of the population is supported by remittances from Kyrgyz migrants in Russia.
“We have historical ties with the Russian Federation, trade relations,” he said. They are leaving the country “between a rock and a hard place,” the minister said, forced to walk a difficult geopolitical tightrope.
