2023.09.27 11:21
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There are sanctions from above, but there are countermeasures from below! Through Turkey, Russian industrial metals continue to be sold to Europe.

The European Union's sanctions against Russia have not completely severed its economic ties with the country. Swiss company Glencore is able to transport thousands of tons of Russian copper to Italy through Turkey, indicating that the EU still relies on Russian products.

It has been more than a year and a half since the Russia-Ukraine conflict, and the European Union has implemented sanctions and decoupling measures against Russia. But beyond political statements, has the EU completely severed its economic ties with Russia?

The answer is obviously no.

According to media reports, in July of this year, Swiss commodity trading giant Glencore reportedly used Turkey as a transit point to ship thousands of tons of Russian copper to Italy. This highlights that despite the appearance of sanctions, the EU still cannot completely break its dependence on Russian products.

Customs documents and photos obtained by the media show that in 2019, Glencore ordered at least 5,000 tons of copper plates produced by the Russian Ural Mining and Metallurgical Company (UMMC) from the UAE entity Haldivor Energy. Then, in July of this year, these copper plates were exported from Turkey to the port of Livorno in Italy. The copper plates will be transported to a wire mill in the Lombardy region of northern Italy for the production of copper products used in cables, transformers, and electronic products.

Glencore stated that this transaction was the "last part" of a contract signed before the Russia-Ukraine conflict broke out, and the company has not conducted new business with UMMC since February last year, in line with its policy of not conducting new business in Russia.

UMMC is the second-largest copper producer in Russia and was included in the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) Special Designated Nationals and Blocked Persons List (SDN) in July this year, subject to "nuclear-level sanctions."

However, although the EU and the UK have also imposed sanctions on UMMC executives, they have left a loophole and have not imposed sanctions on the company itself.

Therefore, from a legal framework perspective, Glencore did not violate the sanctions. These transactions highlight Europe's dependence on Russia for key commodities and the important role of countries such as Turkey and the UAE as transit centers and intermediaries.

An Italian government official told the media:

"Trade conducted through third countries has created obstacles to the implementation of EU sanctions."

Russia is one of Turkey's most important trading partners, and its economy is highly dependent on a large amount of energy imported from Russia.

As a bridge connecting Europe and Asia, Turkey has not participated in the Western sanctions against Russia and has maintained close diplomatic and economic relations with the Putin government. It is also a key transit station for Russia's zinc, copper, and aluminum shipments to Europe.

Data from Trade Data Monitor shows that in the first seven months of 2023, Turkey's copper imports from Russia nearly doubled compared to the same period last year, reaching 159,000 tons, accounting for one-third of Turkey's copper imports.

Research firm CRU Group estimates that in the first six months of 2023, Turkey's overall imports of cathode copper and wire will reach 330,000 tons, an increase of 125,000 tons compared to the same period last year, which the company says is "far beyond Turkey's domestic demand."

In Europe, Italy has become Turkey's largest destination for copper exports, with a 3% increase this year, while Germany and the UK have seen significant declines. Analysts point out that this indicates that Italy is becoming an indispensable part of the Russian copper trade route.