EU Sanctions - The Times Of Central Asia

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EU Sanctions

EU Targets Kyrgyz Financial Sector Over Russia Sanctions Evasion

At the beginning of the year, the news agenda surrounding Kyrgyzstan shifted dramatically. Several media outlets reported that the European Union is considering restrictive measures affecting Kyrgyzstan as part of its 20th sanctions package against Russia. This does not imply direct sanctions against the state itself, but rather potential measures targeting banks, oil companies, and cryptocurrency services that, according to Brussels, may facilitate circumvention of the sanctions regime. For Kyrgyzstan’s economy, which is highly sensitive to cross-border capital flows, this represents a serious warning signal. EU Special Envoy for Sanctions David O’Sullivan, who visited Bishkek, outlined Brussels’ principal concern: a sharp increase over the past year in imports of machine tools and radio equipment into Kyrgyzstan. According to O’Sullivan, exports of certain categories of goods have risen by several hundred percent compared with the pre-war period. These goods fall into the category of dual-use products, and even relatively inexpensive components can be incorporated into drones or missile systems. The EU’s core argument is that such goods are neither produced nor consumed in significant volumes within Kyrgyzstan but are imported from Europe for subsequent re-export to Russia. Brussels views this pattern as evidence of systematic transit. The European Commission is also advocating restrictions on exports of certain machine tools and radio equipment to Kyrgyzstan. According to cited sources, exports of sanctioned technologies to Kyrgyzstan have increased eightfold since the start of the war in Ukraine, while shipments of equipment from Kyrgyzstan to Russia have risen by approximately 1,000%. O’Sullivan stated that the EU “does not impose sanctions on countries,” but rather on specific companies and banks. In practical terms, however, the distinction can be largely formal for the national economy. In October 2025, the EU added two Kyrgyz banks, Tolubay Bank and Eurasian Savings Bank, to its sanctions lists. According to the special envoy, the measures do not prohibit domestic operations, but they do restrict transactions with European financial institutions. In practice, this means the loss of correspondent banking relationships and limited access to SWIFT. Previously, Keremet Bank, Capital Bank, and the cryptocurrency platforms Grinex and Meer were sanctioned by the United Kingdom and the United States. In November 2025, Canada imposed sanctions on Capital Bank of Central Asia and the A7 platform. Brussels has formally stated that it respects Kyrgyzstan’s sovereignty and its legitimate trade relations with Russia and does not seek to halt lawful trade or remittance flows from migrant workers. According to O’Sullivan, preventing transit should not generate significant economic losses, as the goods in question represent only a “tiny fraction” of trade and do not create substantial added value within Kyrgyzstan. A Delicate Balancing Act The situation is further complicated by the lack of full consensus within the EU itself regarding the new sanctions package. Kyrgyzstan finds itself at a difficult intersection of interests. On one side are longstanding economic ties with Russia; on the other, the growing importance of the EU as a source of investment, grants, and institutional support. Following an extended meeting between First...

Z5+1

Germany Builds a Z5+1 in Central Asia

Germany’s meeting on February 11 with the five Central Asian foreign ministers in Berlin formalized the Z5+1 (“Z” for “Zentralasien”) format as a standing work channel. It joins other “plus-one” formats now crowding Central Asia that function as instruments of influence. The United States is using C5+1 to push a more deliverables-oriented agenda, including critical raw materials, and China has institutionalized leader-level summitry with accompanying treaties, grants, and transport-centered integration. The EU has elevated its relationship to a strategic partnership and is putting Global Gateway branding behind connectivity and investment. Germany’s Z5+1 is best understood as Europe’s effort to add a practical, tool-driven channel that can move faster than EU consensus in some domains while still feeding EU programming rather than competing with it. The concluding Berlin Declaration reads like a program sheet with named instruments, sector priorities, and established a direct link to the EU’s broader “Team Europe” posture through the participation of EU Special Representative Eduards Stiprais. Germany’s Z5+1 fits this competitive field as a European execution lane that can move projects forward with German instruments while staying aligned with EU programs. Berlin Defines the Tools The Z5+1 meeting in Berlin drew on a sequence that Germany has been building since its 2023 “Strategic Regional Partnership” and subsequent summits in Berlin (2023) and Astana (2024), with an explicit emphasis on Central Asian regional cooperation as a counterpart to bilateral ties. The Berlin meeting, therefore, did not attempt to invent a new regional architecture but rather added a stable ministerial format for pushing forward project lists, regulatory expectations, and finance conditions between higher-level meetings. In Berlin, Germany committed €2.7 million to a cooperation platform for the Trans-Caspian Transport Corridor: a small sum by infrastructure standards, but targeted at unglamorous coordination like data-sharing, planning discipline, and institutional continuity, i.e., standards and transborder management regimes where corridor initiatives often stall. This profile complements the EU-backed Trans-Caspian Coordination Platform track, which is explicitly tied to a wider €10 billion commitment announced at the January 2024 Global Gateway investors forum for EU–Central Asia transport connectivity. and which has addressed the corridor less as a construction problem than as a finance-and-sequencing problem. Berlin also explicitly supported the commercial participation of German rail and logistics firms in transport and consulting projects, aligning with the intent to keep firm-level engagement attached to ministerial diplomacy. The declaration references export credits and investment guarantees, and links them to business-environment expectations. On the same day, the German Eastern Business Association convened a “Wirtschaftsgespräch” (economics talk) in the Foreign Office with the Central Asian delegations. There, the region was framed as strategically significant for Germany’s diversification agenda, and it was signaled that an autumn leaders’ summit is already in view. Germany’s public accounting of its regional engagement in Central Asia stresses its already-deep base of activity in Kazakhstan and Uzbekistan in particular, including dozens of projects and multi-billion-euro volumes. The energy transition was mentioned, as the Berlin Declaration points to renewables, hydrogen, and climate programming that Germany is already funding...

Dismissals

Kyrgyz President Dismisses Right-Hand Man to “Prevent a Split in Society”

A political earthquake hit Kyrgyzstan on February 10. The tandem of President Sadyr Japarov and security chief Kamchybek Tashiyev was seemingly broken when Japarov dismissed Tashiyev from his post. The reason given for relieving Tashiyev of his position was that it was “in the interests of our state, in order to prevent a split in society, including between government structures,” which hinted that something serious had caused the rift. Old Friends After the brief tumultuous events of October 5-6, 2020, that saw the government of President Sooronbai Jeenbekov ousted in the wake of parliamentary elections plagued by violations, Japarov came to power and appointed Tashiyev to be head of the State Committee for National Security (GKNB). The two have remained in those positions and were often referred to as a tandem. Some believe Tashiyev has actually been the one making many of the important state decisions. Their relationship goes back much further, to the days when Kurmanbek Bakiyev was Kyrgyzstan’s president from 2005-2010. In August 2006, Japarov, Tashiyev, and some other politicians from Kyrgyzstan’s southern Osh area cofounded the Idealistic Democratic Political Party of Kyrgyzstan, which later became the foundation for the Ata-Jurt party. Both Japarov and Tashiyev were supporters of President Bakiyev. When Bakiyev was forced to flee the country after the 2010 revolution in Kyrgyzstan, the Ata-Jurt party became the strongest opposition party to the government that emerged after the revolution. Ata-Jurt won the most seats, 28, in the snap October 2010 parliamentary elections, and among the party’s deputies were Japarov, Tashiyev, and another politician named Talant Mamytov. The three Ata-Jurt deputies helped organize anti-government protests, and during one outside the government building in Bishkek in October 2012, Japarov, Tashiyev, and Mamytov jumped the fence and led an armed crowd to the building. All three were convicted in 2013 of trying to overthrow the government. They were sentenced to a mere 18 months in prison, but did not even serve that, with all three being released in July 2013. Japarov helped lead a protest in Kyrgyzstan’s northeastern Issyk-Kul Province in October that year. A local official was captured and briefly held by protesters, and after order was restored, Japarov was charged with hostage-taking. He fled the country and only returned in March 2017. Japarov was immediately arrested and sentenced to 11 ½ years in prison. A crowd released Japarov from prison when unrest started on October 5, 2020. Tashiyev was among those who quickly put forth Japarov to be Kyrgyzstan’s next leader, and by October 15, Japarov was both acting prime minister and acting president. He appointed Tashiyev to be GKNB chief on October 16. Mamytov was elected speaker of parliament on November 4, 2020. The Dismissal Tashiyev was in Germany receiving medical treatment when Japarov dismissed him. On February 11, Tashiyev commented from Germany on his dismissal, calling it unexpected, but said he would heed the president’s decision. “I served our state, people, and president honorably, and I'm proud of it,” Tashiyev said, and expressed his “gratitude...

EU Sanctions

Kyrgyzstan’s Sanctions Dilemma: Drifting from the Central Asian Consensus?

While Kyrgyzstan is improving relations with the United States by hosting the second B5+1 forum in its capital, with the participation of U.S. Special Representative for South and Central Asia Sergio Gor, Bishkek’s relations with Brussels appear to be deteriorating. The European Union is discussing possible sanctions against Kyrgyzstan, and is reportedly considering a ban on the import of certain categories of goods into the country. According to Bloomberg, which was the first to disclose details of the EU’s upcoming 20th package of sanctions against Russia, Brussels is prepared to restrict Kyrgyzstan’s trade in machine tools and radio equipment over allegations of helping the Kremlin circumvent existing bans. The Kyrgyz government has already responded to the report. On February 3, Deputy Prime Minister Daniyar Amangeldiev held a video conference with EU sanctions envoy David O’Sullivan, during which the sides agreed to engage in “constructive and substantive dialogue on issues related to sanctions.” Further discussions are expected during O’Sullivan’s visit to Bishkek at the end of the month, scheduled for February 26. Even before the EU representative’s visit, Kyrgyz officials have publicly commented on the prospect of sanctions, offering a clear sense of the tone likely to shape the dialogue. In an interview with Azattyk, Amangeldiev stressed that Kyrgyzstan has imposed restrictions on the export of dual-use goods, including weapons, and therefore sees no grounds for measures against the state. He also suggested that any potential restrictions might not take the form of sanctions against Kyrgyzstan itself, but rather recommendations to individual EU member states not to supply certain goods to the republic. Deputy Chairman of Kyrgyzstan's Cabinet of Ministers, Edil Baisalov, emphasized that Bishkek consistently communicates its position to European officials, arguing that its “trade relations with Russia do not cause any damage to third countries.” As a negotiating advantage, Baisalov pointed to what he described as growing international attention toward Kyrgyzstan. “Compared to the past, interest in our country and in the history of its socio-economic strengthening has grown significantly,” Baisalov said. “I believe the European authorities have enough patience, wisdom, and understanding not to damage relations with the Kyrgyz Republic. There is no need to create the impression that they intend to restrict us in any way or undermine our policy of national development and economic strengthening.” At the same time, small and medium-sized businesses in Kyrgyzstan are already facing serious difficulties due to the existing sanctions regime, even though these measures do not directly target the country’s key economic sectors. The logistics sector has been hit hardest. Delivery times have increased, costs have risen, visa requirements for drivers have tightened, and the volume of required documentation has expanded significantly. International payments have emerged as a separate challenge. Transfers in dollars, euros, and other currencies are increasingly delayed. Banks demand additional explanations, scrutinize the origin of funds, and in some cases suspend transactions indefinitely, creating cash-flow gaps. To reduce risks, companies are spreading payments across multiple banks: one for ruble transactions, another for Europe, and a third for...

Sanctions

How U.S. and EU Sanctions Are Rippling Through Central Asia

Russia’s economy has faced renewed pressure following a fresh round of sanctions imposed this past week by both the European Union and the United States. After abruptly canceling a planned meeting with Vladimir Putin in Budapest, President Donald Trump shifted to a more hardline stance, announcing new sanctions. While these sanctions may not cripple Moscow, they are already having secondary effects on Central Asia, particularly on Kazakhstan’s banking and energy sectors. The EU's 19th sanctions package, adopted on October 22, introduces a phased ban on Russian liquefied natural gas (LNG). According to Reuters, short-term contracts will be terminated within six months, while long-term contracts are to expire by January 1, 2027. The package also includes a total ban on transactions with Russian oil giants Rosneft and Gazprom Neft, an expanded blacklist of so-called "shadow fleet" vessels, and sanctions against 45 companies in Russia and third countries supplying military-related technologies. Of growing concern in Central Asia is the inclusion of several regional financial institutions in the EU's sanctions list. These include the Kazakh branch of Russia’s VTB Bank, Kyrgyz banks Tolubai and Eurasian Savings Bank, and Tajik banks Dushanbe City Bank, Kommertsbank of Tajikistan, and Spitamen. These restrictions are scheduled to take effect between November and December 2025. Both Kyrgyzstan’s President Sadyr Japarov and the nation's Foreign Ministry have publicly expressed dismay over the sanctions, with Japarov urging Western leaders to stop “politicizing the economy.” In his speech at the UN General Assembly in New York in September, Japarov criticized the impact of unilateral sanctions, while the Foreign Ministry has stated that the country adheres to its international obligations and maintains an open dialogue with the EU to prevent risks associated with possible sanctions circumvention. The ministry has proposed launching an independent, internationally recognized audit and forming a joint “Kyrgyzstan-European Union” technical working group to facilitate data exchange, transaction monitoring, and risk assessments. In Kazakhstan, the National Bank downplayed the impact of sanctions against VTB. Deputy Chairman Yerulan Zhamaubayev noted that the bank had already been under nominal restrictions, and handles few transactions. “VTB does not affect the country’s financial stability, and we do not expect serious risks for the economy,” Zhamaubayev stated. However, the latest U.S. sanctions may prove more consequential for Kazakhstan, particularly amid efforts to strengthen bilateral trade with the United States, including through the repeal of the Jackson-Vanik amendment. The U.S. Treasury Department has sanctioned Russian oil majors Rosneft and Lukoil. The latter has deep economic ties with Kazakhstan. Just days before the announcement, on October 14, President Kassym-Jomart Tokayev personally attended the 30th anniversary of Lukoil’s operations in Kazakhstan, awarding CEO Vagit Alekperov the Order of Barys, first class. Oil and gas journalist Oleg Chervinsky reported that the joint venture Kalamkas-Khazar Operating LLP, co-owned by Lukoil and KazMunayGas, is directly affected. “Only the Tengiz and CPC projects, which Lukoil operates with American partners, have been exempted from the sanctions,” Chervinsky noted. A final investment decision for Kalamkas-Khazar was expected in December 2025. Yerkanat Abeni, a member of...

Coal

EU Grants Kazakhstan Exemption to Transit Coal Through Sanctioned Russian Ports

The European Union has granted Kazakhstan an exemption permitting the transit of Kazakh coal through select Russian ports previously restricted under EU sanctions. The decision, included in the EU’s 18th package of sanctions, aims to secure Kazakhstan’s coal exports to Europe. The exemption follows months of negotiations led by the Ministry of Trade and Integration, the Ministry of Foreign Affairs, and Kazakhstan’s Permanent Mission to the EU. The talks were prompted by sanctions introduced in February 2024 under the 16th EU sanctions package, which included a ban on transactions with Ust-Luga port, one of the main routes for Kazakh coal shipments to the EU. “To resolve the situation, work was carried out at various levels and an official request was sent to the European Commission asking for changes to the sanctions regime,” the ministry stated. “As a result, the 18th package of EU sanctions contains amendments allowing transactions with a number of Russian ports for the transit of coal of Kazakh origin.” Conditions of the Exemption The exemption is conditional and tightly regulated: Only coal of Kazakh origin may be transited; Ownership of the cargo must not involve entities from countries under EU sanctions, including Russia and Belarus; The designated Russian ports may be used solely for transit purposes, specifically loading and dispatch, without any procurement or production activities on site. Trade Impact Kazakhstan remains a key coal supplier to the European market. In 2022, it exported 4.4 million tons of coal to the EU, generating $419.2 million, representing 45% of total coal exports. Although volume increased to 6.1 million tons in 2023 (54.3%), falling global prices reduced revenue to $382 million. In 2024, exports declined to 5.2 million tons worth $312.5 million (51.8%). During the first five months of 2025, Kazakhstan exported 1.6 million tons to the EU, generating $82.9 million and accounting for 38.5% of total coal exports over that period. “Despite the temporary decline in indicators, the measures taken are creating conditions for the restoration of export flows and increased stability of logistics routes,” the ministry said. “Kazakhstan will continue to work to protect trade interests, support national exports, and strengthen economic ties with key partners.” As previously reported by The Times of Central Asia, domestic coal consumption in Kazakhstan is expected to decrease due to government plans to phase out pilot coal-fired power plants in favor of renewable energy and low-carbon technologies, including gas.