For the past two years, Armenia has been attempting to demonstrate its shift towards the West, all the while maintaining its geopolitical role as a link between Russia and Iran for dubious purposes.
Since the onset of the war in Ukraine, Armenia has served as a conduit for Russian imports of prohibited goods and technology, a tactic previously employed by Iran to evade Western sanctions. The Russians bring in electronics and spare parts needed for war and launder money through Armenia, as Iran did for a decade. The West did not react, and impunity taught Yerevan it can keep enjoying both worlds.
The most disturbing part is that all the circumventions of sanctions against Russia and Iran are not a secret; the leading western media has published a vast amount of information about Armenia’s activity for the benefit of the Axis of Evil.
The Russian connection
In 2022, against the backdrop of extensive Western sanctions against Russia, trade between Armenia and the Russian Federation nearly doubled, reaching USD 5.3 billion. Armenian exports to Russia saw an almost threefold increase, rising from USD 850 million in 2021 to USD 2.4 billion in 2022, while imports amounted to USD 2.87 billion. By 2023, Armenian exports to Russia grew by an additional 38.8 percent, reaching approximately USD 3.42 billion.
In the first half of 2024, trade turnover between Armenia and Russia surged 2.6 times, reaching USD 8.4 billion. Simultaneously, Armenia’s imports from EU countries experienced significant growth, increasing from 757 million Euros in 2021 to 1.9 billion Euros in 2022, marking a 149 percent rise. During this period, overall trade turnover between Armenia and the EU climbed from 1.214 billion Euros to 2.487 billion Euros.
Given Armenia’s limited industrial capacity to significantly boost production and export volumes to multiple countries, many business experts believe that Armenia could be facilitating re-export activities to Russia, further fueling trade growth, which actually constitutes a circumvention of the sanctions.
Yerevan literally brings Russia everything that is needed for its war effort. According to a U.S. Bureau of Industry and Security report, cited by The New York Times, between 2021 and 2022, Armenia’s imports of chips and microprocessors from the U.S. surged by 515 percent, while imports from the EU grew by 212 percent. Notably, 97 percent of these products, including eight highly sensitive semiconductor chip categories, were ultimately re-exported to Russia. These components were reportedly used for military applications within Russia.
The Financial Times revealed that over USD 1 billion of EU exports, restricted by sanctions, have disappeared while en route to Russia’s trade partners, in what is described as “ghost trade.” Western officials suspect this is aiding Russia’s war economy, with Armenia implicated in the network. A DW investigation highlighted a spike in Armenia’s diamond and gold exports, with Armenia re-exporting Russian-origin gold as its own, despite EU sanctions on Russian diamonds and precious metals. In 2023, Armenia exported USD 1.8 billion in gold and USD 589 million in diamonds, with further increases in 2024.
DW reported that Armenia is exporting large quantities of gold labelled as Armenian despite not producing such volumes. In 2023, Armenia officially exported USD 1.8 billion in gold and USD 589 million in diamonds. By early 2024, gold exports surged to USD 2.5 billion and diamond exports to nearly USD 200 million. The processing of raw materials, including precious metals, increased by 31 percent, raising concerns about the origins of these exports amid ongoing sanctions against Russia.
According to The Guardian, Iran has been using both boats and its state-owned airline to smuggle various types of drones into Russia. These smuggled drones have reportedly been used to support Russia’s military efforts in Ukraine. This covert operation highlights the deepening military collaboration between the two nations despite international sanctions and diplomatic concerns. A Polish-based NGO think tank reports that Armenia facilitated weapons deliveries to Russian forces in Ukraine by permitting Iranian cargo planes to make stopovers at its airports. These planes continued on to deliver military supplies, including drones, to Russia for use in the conflict.
The Iranian connection
Earlier the month the Iranian state news agency Mehr reported on the inauguration of Iran’s Trade Centre in the Armenian capital of Yerevan, which will be Tehran’s gateway to the Eurasian Economic Union (EAEU) – a Russian controlled economic alliance that includes Belarus, Armenia and Kazakhstan.
The design of Iran’s Trade Centre in Yerevan spans a land area of over 18,000 square meters, and it will feature exhibition space accommodating 107 exposition booths. This move will tighten the Iranian-Russian grip over Armenia.
But it is not just the center; in the past six months, Armenia and Iran have significantly strengthened their bilateral relationship, particularly in the economic and political spheres. Between 2020 and 2023, Armenia and Iran have made strides in their economic partnership, as by 2023 the trade volume between the two nations reached USD 566.7 million, a small increase compared to 2022. But in September this year, the Iranian Ambassador to Yerevan, Mehdi Sobhani announced an allocation of 3 billion U.S. dollars for strengthening economic ties with Armenia. This amount is 4.5 times bigger than the total trade volume between the two states in 2023.
The announcement came soon after the report by the Iran International TV channel about the secret USD 500 million arms deal, which includes the provision of advanced drones and air defense systems from Iran to Armenia. This agreement includes establishing Iranian military bases on Armenian soil.
This is another step in turning Armenia into an Iranian proxy state, foreign policy experts warn. A year ago, Israel’s Alma institute released a report on September 25 elaborating on how Armenia functions as a transit point in the Islamic Republic’s air corridor route to Syria and Lebanon.
The airport in Yerevan was used to transport weapons, equipment, and operatives to Syria’s Aleppo and Damascus airports, and then by land to Lebanon. The flights were conducted by the Armenian Flight Travel LLC airline, created in 2018 as a front for the Iranian Mahan Air company, already under U.S. sanctions.
Despite all these facts, there are still politicians in the EU and the U.S. who sincerely believe in the Armenian pro-Western assertions. Strangely enough, the EU has started the process of visa-liberalization with Armenia. As a result, the EU and the West in general are helping Iran and Russia circumvent sanctions altogether and strengthen their positions in Armenia.
