“The assertions on the use of Georgia to circumvent sanctions on Russia are seemingly only based on doubtful general assumptions,” reads the report of the Swiss Institute for Global Affairs (SIGA) on Georgia-Russia increased bilateral trade.

According to the report, while the transiting of goods from third countries to Russia via Georgia has significantly increased (by about 50% in 2022 when compared to 2021 and by almost 20% in 2023 when compared to 2022), various Georgian sources confirmed to SIGA that Georgian customs are thoroughly checking all transit goods to make sure that such trade is not used to circumvent sanctions.

“The often-cited increased bilateral trade between Georgia and Russia and transit trade through Georgia to Russia is almost certainly simply caused by benign changes of trade flows,” reads the report.

The SIDA says that the circumvention of sanctions by transit cannot be completely ruled out. However,  various Georgian sources confirmed to SIGA that Georgian customs are thoroughly checking all transit goods to make sure that such trade is not used to circumvent sanctions.

The authors of the report stress that the vast majority of goods that Georgia exports to Russia are “harmless.” “The exports that significantly increased from Georgia to Russia and make up the lion’s share of all exports are almost exclusively food and beverages,” it reads.

“The only category of goods that Georgia has been exporting in high amounts to Russia and that could theoretically be of concern is ferroalloys. However, as the mentioned study and a review of trade data for the full year of 2023 and the first five months of 2024 shows, the export of ferroalloys from Georgia to Russia has drastically decreased since Russia’s full-scale invasion of Ukraine, contradicting the notion of a booming business of sanctions circumvention,” reads the report.

The report also says that there are indeed some so-called dual-use goods on the list of Georgian exports to Russia, namely some mechanical and electronic components. “However, as the cited study as well as later trade data shows, the worth and amount of such goods is so low that they would, even if they would end up for military and not civilian purposes, not be able to undermine sanctions in any meaningful way.”

“There have been cases where concerns were raised that companies and individuals in Georgia might import Western goods that fall under sanctions and then re-export them to Russia, thereby circumventing sanctions. However, also in such cases, scrutinising data did not show any smoking gun,” it says.

The SIGA conducts, supports and promotes interdisciplinary research on geopolitical and security policy topics.