Russia is pressing Kyrgyzstan to ease up on the enforcement of Western sanctions covering bilateral trade, especially dual-use items with military applications. Kyrgyz officials aren’t showing signs, at least outwardly, of caving to the Kremlin’s wishes.

Both countries have used coded language in public statements when discussing the sanctions issue, never referring to sanctions explicitly. During a January 31 intergovernmental session, Russian Prime Minister Mikhail Mishustin called on the Kyrgyz government to stop “unfairly targeting“ Russian businesses operating in Kyrgyzstan.

“We ask that the leadership of Kyrgyzstan stop the administrative pressure on our companies and ensure the protection of the rights and legitimate interests of Russian investors,” Mishustin said during the session. Mishustin went on to indicate that some Russian entities had been subjected to extortion attempts by Kyrgyz officials he did not name. The Russian prime minister also claimed that the businesses operating in Kyrgyzstan were “honest” and “conscientious,” and among the highest tax contributors to Kyrgyz state coffers.

Kyrgyz officials at the meeting said they would study the issue and get back to Mishustin. The response came the next day, delivered by Almambet Shykmamatov, the chief of Kyrgyzstan’s State Taxation Service, or GNS. 

Using the taxation issue as cover, Shykmamatov politely, but effectively told Russia not to expect more lenient enforcement. 

“In Kyrgyzstan, all legal conditions have been created for foreign investors and entrepreneurs, and no one can be given an unreasonable advantage,” the Kabar news agency quoted the GNS head as saying.

Kyrgyzstan has long been suspected of acting as a back door for Russia-bound illicit trade. Accordingly, many Russian entities in the country are viewed as enabling sanctions-busting commerce. Gaps in trade data help support Kyrgyzstan’s image as a sanctuary for sanctions-busting. For example, official statistics for 2024 published by Georgia show that $964 million worth of vehicles were shipped from Georgia to Kyrgyzstan, but Kyrgyz data recorded only $50 million-worth of vehicles entering the country from Georgia. The missing vehicles are widely presumed to have ended up in Russia. 

Russian-connected entities in Kyrgyzstan are showing up on the US Treasury Department’s sanctions list. The latest entity to be designated is OJSC Keremet Bank. In a statement issued January 15, the Treasury Department asserted that the bank “coordinated with Russian officials and US-designated Russian bank Promsvyazbank Public Joint Stock Company (PSB) to implement a sanctions evasion scheme.” 

According to the Treasury Department, the Kyrgyz government in 2024 sold a controlling interest in Keremet Bank to a firm “strongly linked” to an unnamed Kremlin-connected oligarch for the purpose of creating a “sanctions evasion hub for Russia to pay for imports and receive payment for exports.”

The Russian government nationalized PSB in 2018 to provide financing for the defense sector, according to the statement. “Since its transformation into the Russian state defense bank, PSB has issued billions of dollars of financial support for Russian military-industrial base companies,” the statement adds.

US pressure on Kyrgyzstan in late 2024 played a role in prompting Kyrgyz leaders to tighten trade rules designed to contain sanctions-busting, including a requirement that Kyrgyz importers must take delivery of goods within 60 days.