Russia Uses Barter Trade to Circumvent Western Sanctions

Russian businesses are increasingly returning to barter trade to circumvent more than 25,000 Western sanctions and the disconnection of Russian banks from the SWIFT payment system. To avoid secondary sanctions, companies are swapping commodities such as wheat and flax seeds for Chinese cars, household appliances, and building materials. This shift toward goods-in-kind transactions, not seen on a significant scale since the 1990s, is primarily focused on trade with China.

To facilitate these efforts, the Ministry of Economy of the Russian Federation issued a Guide to Foreign Barter Transactions in 2024 and proposed the creation of a dedicated barter exchange platform. While the Federal Customs Service of Russia describes the volume of these deals as insignificant, analysts highlight a $7 billion divergence between central bank and customs statistics from the first half of the year as evidence of the practice's scale.

Other workarounds used to maintain trade include the use of cryptocurrencies, payment agents, multilateral netting, and VTB Bank's Shanghai branch. Despite claims from President Vladimir Putin that the economy has outperformed expectations, the central bank indicates Russia is technically in recession with high inflation. Industry leaders describe the growth of barter as a symptom of de-dollarization and liquidity problems among partners.