How are billions in dollar and euro notes still reaching Russia?

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Billions in Dollar and Euro Notes Continue to Reach Russia Despite Sanctions

Approximately US$2.3 billion in dollar and euro banknotes have been shipped to Russia since March 2022, indicating that Russia has successfully bypassed sanctions intended to block cash imports. These funds have been transported from countries such as the United Arab Emirates and Turkey, which have not imposed trade restrictions on Russia. The continued inflow of foreign currency highlights ongoing demands for cash among Russians for various purposes, despite efforts by Moscow to reduce its reliance on hard currencies and the freezing of significant portions of the Bank of Russia’s foreign reserves.
Circumvention Through Third Countries

Since March 2022, Russia has received around US$2.3 billion in dollar and euro bills, primarily from countries like the UAE and Turkey that have maintained trade relations with Moscow. Customs data indicates that the origin of over half of these shipments was not specified. This circumvention of sanctions, which prohibit the export of US and EU banknotes to Russia, demonstrates a continued flow of foreign currency into the country. The US government has warned financial institutions against assisting Russia in evading sanctions, imposing penalties on third-country companies throughout 2023 and 2024.
Demand for Foreign Currency Remains

Despite Russia's efforts to de-dollarise and the labelling of dollars and euros as "toxic" following sanctions, there remains a notable demand for foreign currency cash. Many Russian individuals still seek these notes for international travel, small-scale imports, and domestic savings, viewing the dollar, in particular, as a reliable currency. This persistent demand underpins the continued, albeit circumvented, flow of banknotes into the country.
Trade in Precious Metals Facilitates Cash Inflow

A significant portion of the imported banknotes, over a quarter of the total US$2.27 billion, was brought in by Russian banks, often as payment for precious metals. Between March 2022 and December 2023, Russian banks received approximately US$580 million in cash from abroad and exported roughly equivalent values of gold and silver. For instance, Vitabank imported US$64.8 million in banknotes from Turkish gold trading firm Demas Kuyumculuk, while exporting US$59.5 million in gold and silver to the same company during the same period.
Company Operations and Customs Declarations

A company named Aero-Trade, which provides duty-free shopping services, declared approximately US$1.5 billion in foreign currency bills between March 2022 and December 2023. These shipments were declared in customs documents as exchange or revenue from onboard trade. While the source and clients of Aero-Trade's cash remain unclear, and the company owner has expressed doubt about the authenticity of the records, such declarations represent a substantial component of the reported banknote inflows. Entities associated with Rostec, Russia's state-owned military-industrial conglomerate, were also identified as major importers of cash.

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How are billions in dollar and euro notes still reaching Russia?

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