Armenia was quick to take advantage of the sweeping sanctions imposed following the Russian invasion of Ukraine, re-exporting second-hand cars, consumer electronics and other goods manufactured in Western countries and their allies to Russia. This explains why its exports to Russia tripled in 2022 and doubled in January-August 2023.
Full-year data released by the Armenian government’s Statistical Committee shows that they rose by less than 39 percent, to $3.4 billion, in 2023. This suggests that the lucrative re-exports largely stagnated last fall and December. The recent introduction of a new Russian tax on imports of used and old cars may have been one of the factors behind the slowdown.
Also, the re-exports prompted concern from European and especially U.S. officials in early 2023. They pressed the Armenian authorities to comply with the Western sanctions. The authorities introduced in May mandatory government licenses for shipments of microchips, transformers, video cameras, antennas and other electronic equipment to Russia.
Overall Russian-Armenian trade soared by more than 43 percent to $7.3 billion. It grew steadily even before the war in Ukraine not least because of Armenia’s accession in 2014 to the Russian-led Eurasian Economic Union.
Russia has since replaced the EU as Armenia’s number one trading partner. According to the Armenian government data, it accounted last year for over 35 percent of the South Caucasus country’s foreign trade, compared with the EU’s 13 percent share in the total.