Zelensky Wants Asia to Stop Enabling Putin’s War

“If you cover half of the river, what difference does it make?” one Ukrainian official said of the evasion of sanctions on Russia.

Ukrainian President Volodymyr Zelensky addresses the Bundestag, Germany's parliament, via live video from Kyiv in the Reichstag in Berlin on March 17. HANNIBAL HANSCHKE/GETTY IMAGES

 

JUNE 10, 2022, 12:44 PM

SINGAPORE—Ukrainian officials are concerned about Russia finding end arounds in Asia to avoid Western sanctions, including limits to purchases of Russian oil, with Ukrainian President Volodymyr Zelensky scheduled to address the Shangri-La Dialogue virtually on Saturday.

Ukraine has been worried in recent weeks that many Asian nations have been bypassing Western sanctions, including the European Union’s embargo against seaborne Russian oil exports, and permitting Russian companies to do business in their countries. While the United States and nearly all of the EU have closed ranks and ratcheted up pressure on Russia after its invasion of Ukraine in February, many countries in Africa and Asia have continued to carry on business as usual with the Kremlin.

“We want to make it impossible for Russia to sustain military operations, and that can be done through both imports and exports,” said Tymofiy Mylovanov, an advisor to the Zelensky administration. “It’s like a river. If you cover half of the river, what difference does it make?”

Mylovanov said Ukraine is trying to make it more difficult for Russia to gain critical imports or transport them, adding that hundreds of companies that have not exited Russia since the invasion are based in Asia or owned by Asian nationals. Cutting Russia out of the regional supply chain also remains tricky, as Moscow remains a prolific miner of gold, nickel, and aluminum, a major steel producer, and a provider of rare earths.

According to an updated analysis conducted by the Kyiv School of Economics in June and provided to Foreign Policy, 182 Asian companies of 332 doing business in Russia—more than half—are staying put more than three months into the war, despite almost a thousand major multinationals from around the world, from McDonald’s to Mastercard, announcing plans to leave or curtailing operations there.

“While companies exit Russia en masse following the invasion of Ukraine, Asian brands have been conspicuously absent from the corporate exodus,” the report stated. “By offering its growing Asian clientele competitive prices for vital resources, Russia is hoping that much of the international community looks the other way as it attempts to expand its energy empire in Ukraine.”

Japan is likely the only Asian country with a significant number of businesses that have left, while Indian and Chinese companies have done the least to cut ties, instead increasing their imports of oil and gas. Russian liquefied natural gas projects are still “substantially” dependent on South Korean ships after Western sanctions, researchers from the Kyiv School of Economics assessed.

Zelensky’s comments are set to come as Southeast Asia has been mostly slow to condemn Russian President Vladimir Putin’s full-scale invasion of Ukraine, and few have signed on to sanctions. Many countries in the region, including India, Malaysia, Thailand, and Indonesia, have large arsenals full of old Russian military equipment and could be vulnerable to sanctions, such as recently enacted U.S. laws that penalize big-budget purchasers of Russian arms.

“The Russians are pretty savvy at bypassing [sanctions],” Mylovanov said.

After Russia illegally annexed Crimea in 2014, the United States and Western Europe imposed stiff, but not devastating, sanctions. Even so, Mylovanov said, Russia managed to gain access to Western technologies critical to manufacturing Russian weapons after 2014. The latest batch of Western sanctions explicitly tightens the noose on the critical materials, many of which are imported, that are key to Russia’s production of precision-guided munitions, advanced fighter jets, naval platforms, and space-based capabilities.

But it’s not just South and Southeast Asia. Current and former U.S. officials have also worried about China potentially flouting those rules to provide Russia some of those critical technologies through back doors. “We’re very, very interested in them not weakening secondary sanctions,” Mylovanov said.

Among the strategies that Russia has used are parallel imports, where key goods are sold to an Asian or European country before being reexported to Russia. The United States has imposed export controls that are intended to deny semiconductors and computer chips to Russia that are necessary to produce weapons and high-tech products, impacting microelectronics, telecommunications, information security items, sensors, navigation equipment, avionics, marine equipment, and civil aircraft components. But the rules also extend to almost everything produced by U.S. software. Many Asian countries back those export bans, such as Singapore, Taiwan, and Japan. But enforcement remains tricky because there are only a handful of U.S. officials to police the rules around the world.

Western officials believe that China has remained hesitant to provide material support for Russia’s invasion three months in. Experts believe that Southeast Asia has been spared the worst of the economic impacts from the invasion but has concerns about the integrity of international law and higher food prices, as well as how to handle Russian involvement in multilateral groupings in the region. But both officials and experts believe that Russia has also received a propaganda boost from China that has prevented Southeast Asian nations from calling out the invasion of Ukraine or fully adhering to the sanctions regime.

“The Chinese have been parroting—with Asian characteristics—Russian propaganda for quite some time,” said Brent Sadler, a military expert at the Heritage Foundation. “It’s been effective. The Russian narrative is in the ascendancy of what’s going on in Ukraine and not the American or the Western one. And that’s because the Chinese have been facilitating and parroting Russian propaganda.”

A senior U.S. defense official told reporters traveling with U.S. Defense Secretary Lloyd Austin this week that the Pentagon boss, on the heels of meeting with his Chinese counterpart, would warn of the “dangers of destabilization” stemming from the Russia-Ukraine conflict. But some experts in the region expect the message to fall flat. Austin also warned Wei Fenghe, his rough equivalent in China’s defense ministry, that providing material support to Russia would be “deeply destabilizing,” the official said after the nearly hourlong meeting.

“I doubt whatever [U.S. President Joe] Biden says or whatever Zelensky says will move the needle at all,” said William Choong, a senior fellow at the ISEAS-Yusof Ishak Institute in Singapore. Southeast Asian “countries don’t have any skin in the game. Ukraine is thousands of miles away from Southeast Asia. They don’t see it in that lens” of protecting human rights and upholding the rules-based international order, he said.