Under a proposed 20th European Union sanctions package against Russia, expected to be adopted by the end of the month, Kyrgyzstan could face certain export restrictions for the first time.
According to draft proposals seen by RFE/RL, the EU is considering export bans on at least two dual-use items -- computer-controlled CNC machines that cut, drill, and shape material as well as radio equipment -- amid concerns that goods exported to Kyrgyzstan may be reexported to Russia, circumventing existing sanctions against Moscow over its war in Ukraine.
The draft package also proposes adding CJSC TengriCoin, a Kyrgyz cryptocurrency company, to the EU blacklist for its role in trading the A7A5 stablecoin, which supports Russian state-linked financial interests.
If approved, the restrictions would be the first application of the EU’s anti-circumvention instrument, introduced in 2023. Unlike traditional sanctions, this tool focuses on sector-specific export bans rather than requiring proof of intentional violations.
Dual-Use Imports
The draft notes that preventing and countering sanctions circumvention in third countries remain a priority. Kyrgyzstan is the first country on the EU’s radar as a potential route for such circumvention, prompting Brussels to propose tighter controls.
The EU plans to expand sectoral restrictions to cover high-precision metalworking machines and communications equipment, blocking exports of these items to Kyrgyzstan. These goods can be used to produce weapons, build military equipment, and support operations such as drone deployment and secure field communications.
Draft EU data shows that exports of these items to Kyrgyzstan rose nearly 800 percent in the first 10 months of 2025 compared with pre-invasion levels, while Kyrgyz exports of the same goods to Russia increased by about 1,200 percent.
“The import of these items into the Kyrgyz Republic from the Union demonstrates a continuing and particularly high risk of circumvention, with these items being subsequently sold, supplied, transferred or exported from the Kyrgyz Republic to Russia,” the draft says.
According to the document, despite repeated EU engagement and technical talks, Kyrgyz authorities have not implemented "effective" controls, leading the bloc to view Kyrgyzstan as a country where sanctions circumvention is ongoing and systematic.
The proposed sectoral restrictions aim to close this loophole across the EU and ensure consistent application in all member states.
Germany, Italy, France, and Poland are among EU suppliers of industrial machinery and electronics to Kyrgyzstan, including CNC and radio components, which Russia used to purchase directly from these countries before the war for its advanced military production.
Unanimous Approval
Any EU sanctions package requires unanimous approval from all 27 member states, so negotiations may modify or delay the final measures.
On February 9, Reuters reported that German Foreign Minister Johann Wadephul will meet with his counterparts from Turkmenistan, Tajikistan, Kyrgyzstan, Uzbekistan, and Kazakhstan in Berlin to discuss energy cooperation and preventing the circumvention of EU sanctions against Russia.
A German government spokesperson noted that the region is important for energy diversification, resource security, and trade in raw materials, while also emphasizing the need to prevent Russian sanctions circumvention through Central Asia.
The spokesperson did not want to say whether Germany would support the proposed EU sanctions against Kyrgyzstan.
According to RFE/RL diplomatic sources, Germany, as a major supplier of industrial machinery and electronics that include components like CNC and radio equipment to Kyrgyzstan, might oppose the draft sanctions to protect its business interests.
Targeting Crypto
The draft package also proposes adding CJSC TengriCoin, a Kyrgyz cryptocurrency company, to the EU blacklist. TengriCoin runs the Meer platform, a major marketplace for trading the A7A5 stablecoin, which is backed by Promsvyazbank, a Russian state-owned bank. The EU views this activity as supporting Russian state-linked financial interests, including those responsible for the annexation of Crimea and the destabilization of Ukraine.
Western regulators have long raised concerns about Russia-linked crypto in Kyrgyzstan. In 2025, the Grinex exchange, launched by Moldovan oligarch Ilan Shor, and the A7A5 stablecoin were already under international scrutiny.
The US Treasury, the UK government, and the EU sanctioned Grinex, A7A5, and their founders. An investigation by RFE/RL's Kyrgyz Service estimated that A7A5 transactions reached $79 billion, while other reports suggest circulation through Grinex exceeded $100 billion by early 2026.
“Therefore, CJSC TengriCoin is supporting and benefitting from the Government of the Russian Federation, which is responsible for the annexation of Crimea and the destabilisation of Ukraine. In addition, CJSC TengriCoin is associated with Promsvyazbank, Limited Liability Company A7 and Limited Liability Company Old Vector,” the EU draft says.
A7A5 was developed by Limited Liability A7 and Limited Liability Company Old Vector, linking CJSC TengriCoin directly to these entities. Through the Meer platform, CJSC TengriCoin channels funds into Promsvyazbank, supporting Russian state financial interests.
Playing Clean
Kyrgyz officials have strongly denied claims that the country facilitates sanctions evasion. Last week, First Deputy Chairman of the Cabinet of Ministers Daniyar Amangeldiev told RFE/RL that Bishkek had received no official notification of sanctions and that reports so far were based on media coverage.
“We are holding consultations with EU Special Envoy for Sanctions David O'Sullivan and have imposed restrictions on the export of weapons and sensitive goods. Trade statistics based on percentage growth can also be misleading when initial volumes were very low,” he said.
Economically, EU export bans on machinery and electronics could disrupt supply chains, increase costs, discourage foreign investment, and make European banks and insurers more cautious in dealing with Kyrgyz counterparties. Once imposed, such measures are difficult to reverse and require sustained proof that reexports have stopped.
In a conversation with RFE/RL, Kyrgyz economist Marat Musuraliev warned that if the EU eventually imposes country-level export restrictions, it could severely harm Kyrgyzstan’s reputation and economic prospects.
“If individuals or private companies profit from bypassing sanctions and the EU then sanctions the country, we will all bear the consequences. It’s easy to fall under sanctions, but very difficult to recover. This would inflict serious damage on our economy,” he said. “It’s also a reputational issue. Anyone considering investing in Kyrgyzstan will not just think once, they will think seven times before making a decision.”
