Revenue Service Demands U.S. Clarification on Sanctions Evasion Allegation

On February 29, the Revenue Service of the Ministry of Finance of Georgia denied the allegations about Georgia violating international sanctions against Russia, made during the February 27 hearing of the U.S. Senate Permanent Subcommittee on Investigations on “U.S. Technology Fueling Russia’s War in Ukraine: How and Why.”

“The U.S.-Georgia trade statistics referenced during the committee meeting do not accurately reflect the real data,” the Revenue Service said, adding that it has demanded clarification and evidence from the U.S. counterparts.

The Revenue Service said that “Georgia fully adheres to the requirements outlined by international sanctions and actively collaborates with partner countries in this regard.”

On February 27, during the said hearing, Chairman of the Subcommittee, Democrat Senator Richard Blumenthal argued that the U.S. technology breakthroughs are sustaining Russian belligerence in Ukraine. “American manufacturers are fueling and supporting the growing and gargantuan Russian war machine…The Russians are relying on American technology,”- he said concluding: “Our exports control regime is lethally ineffective and something has to be done.”

“Although our inquiry is ongoing, our initial findings show that those third-party intermediaries located in countries bordering Russia are used to evade U.S. export controls,” the Senator said.

In this context, he cited “the astronomic increases in exports to Kazakhstan” from four companies whose products constitute the bulk of the technological products ending up in Russian weapons systems, which according to him went up “a thousand times from 2021 to 2022 are matched in the same period by exports going to Georgia- 34 times greater, exports to Armenia- 28 times greater, exports to Turkey more than double and exports to Finland were roughly 1.5 times higher.”

According to another Senator, Republican Ron Johnson, “based on preliminary information,” the non-sanctioned countries including Armenia, Finland, Georgia, Kazakhstan, and Turkey appear to be “legally importing military components from the U.S. and then either directly or indirectly exporting the semiconductors to end users in Russia.”

The hearing was dedicated to discussing how the U.S. technology ends up in Russia’s hands, and how this can be countered. The Subcommittee heard the testimonies from experts in the field including Elina Ribakova, Director of the International Affairs Programme and Vice President for Foreign Policy Kyiv School of Economics; James Byrne, Director of the Open Source Intelligence and Analysis (OSIA) department at the Royal United Services Institute (RUSI), and Damien Spleeters, Deputy Director of Operatons of the Conflict Armament Research.

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This post is also available in: ქართული (Georgian) Русский (Russian)


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