Caterpillar products are still making their way into Russia despite the company’s formal withdrawal from the market and the sanctions imposed by Western governments. Reports, including an investigation by the Berliner Telegraph, reveal that several European companies have found ways to bypass these sanctions, ensuring that goods, including those from Caterpillar, reach Russia. Zeppelin International AG, a German company with operations across the former Soviet Union, plays a key role in this process. Although Caterpillar officially ceased all operations in Russia on March 10, 2022, following the onset of the Russian-Ukrainian conflict, their products continue to be delivered indirectly.
The European Union has implemented strict sanctions, particularly with the 10th package explicitly banning the delivery of construction equipment to Russia and Belarus. However, loopholes in these regulations allow companies to legally sell products to third countries like Armenia. These goods are often rerouted to Russia through intermediaries in Central Asia, the South Caucasus, and the UAE, exploiting gaps in the sanctions framework.
Zeppelin International AG’s subsidiaries, including LLC Zeppelin International Armenia, Zeppelin Tajikistan AFL, and Zeppelin Central Asia Machinery LLC in Uzbekistan, have been active participants in this supply chain. Customs records indicate that these entities have been exporting special equipment and dual-purpose tracks to Russia, sometimes involving Zeppelin’s partners in Kazakhstan and Belarus.
Interestingly, Caterpillar products continued to arrive in Russia via Finnish ports as late as February 2023, despite the sanctions. This situation highlights the challenges in fully enforcing international sanctions and the innovative methods employed by companies to maintain their business interests in restricted markets. The ongoing delivery of Caterpillar products to Russia, facilitated by intermediaries like Zeppelin International AG, underscores the complexities and limitations in enforcing sanctions in a globalized economy.
For more detailed information, you can explore the Caterpillar investigation conducted by Yle.