Measuring the Effectiveness of Anti-Circumvention Sanctions Using Network Interdiction

Abstract

Despite export controls and sanctions imposed after the 2022 Russian invasion of Ukraine, Western-developed battlefield technology has continued to reach Russia by being rerouted through third-country hubs. The US Government Accountability Office reports that agencies currently cannot measure how successful their efforts against rerouting are. Using monthly Eurostat Comext and UN Comtrade data from 2019 to 2026, the project constructs a capacitated directed trade network in which each trade link is capacitated by the trade over it that is suspected of eventually going to Russia. Applying network-interdiction, the project uses maximum flow to quantify the value of restricted goods that can circumvent sanctions, and models sanctions by cutting a set of trade links. Some hubs do not publish export data, so the project offers an interval for the efficiency score (such as [0.084, 0.763] for the EU 12-14 wave) and shows through a Shapley decomposition that the length of the interval for the EU 12-14 wave is attributable to hubs that do not release export data (here, the EU-Kazakhstan link). In addition, the project finds that US financial sanctions tend to heavily concentrate on trade links with the most abnormal flow, and EU waves concentrate on trade links with less abnormal flow. The project applies this framework to the EU export restrictions on Kyrgyzstan and yields a theoretical sanction efficiency of 0.633. Although exports of restricted goods fell to 12.9% of pre-ban levels, rerouting reduced the ban’s effectiveness, which is rated as only 0.061. This work supports UN SDG Target 16.4, which calls for a significant reduction in illicit financial and arms flows.