Crossroads Asia | Economy | Central Asia

Kyrgyzstan Liquidates More Companies Over Sanctions Risks

19 more companies have been ordered to close down, and more than 140 have been cut off by their state-owned banking partners. 

Another 19 Kyrgyz companies are being ordered to close down as Bishkek strives to assuage Western concerns about the evasion of Russia sanctions. 

Kyrgyzstan’s top leaders, including President Sadyr Japarov, have long denied that the country was aiding in the circumvention of sanctions on Russia over the war in Ukraine. In August 2025, Japarov told state media outlet Kabar, “On our part, not a single case has been reported of circumvention of sanctioned goods going to Russia.” That same month, he denounced sanctions against Kyrgyz banks as “politicized.” Then, during his U.N. General Assembly speech in September 2025, Japarov railed once again against sanctions targeting Kyrgyz banks, claiming, “The sanctions imposed on Kyrgyzstan are based on false information spread by certain non-governmental organizations and dishonest people.”

A year later, Japarov may not have changed his tune but the Kyrgyz government has changed its tactics from outright denial to action. The proximate trigger appears to have been pressure from the European Union. 

In February, the EU’s sanctions envoy, David O’Sullivan, paid a visit to Kyrgyzstan. O’Sullivan told reporters that trade flows suggest that some goods “are being imported into Kyrgyzstan with the sole purpose of being re-exported to Russia, in breach of our sanctions.” He went on: “We are not asking Kyrgyzstan not to have trading relations with Russia. We only ask that that trading relationship does not involve the deliberate circumvention of our sanctions by the transmission through Kyrgyzstan of sanctioned EU goods to Russia.”

Two months later, in April, the EU used its “anti-circumvention tool” for the first time, and the target was Kyrgyzstan. This paved the way for the EU to “restrict the sale, supply, transfer or export of specified sanctioned goods and technology to certain third countries” considered to be at high risk of providing pathways for the circumvention of sanctions. These goods included machining centers – used in the production of high-precision metal components for missiles and drones – and communications technologies. 

The EU’s decision was based on trade data, which is difficult to........

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