Maldives Faces Pressure to Crack Down on Shipments of Sanctioned Goods to Russia

  • Maldives
  • World
  • Business
PUBLISHED 22 July 2023

An investigation by Nikkei Asia has revealed that the Maldives is being used as a major transit point for shipments that are flouting the sanctions and export controls that are being applied to Russia.

The investigation found that approximately 400,000 U.S.-made semiconductors, valued at $53.6 million, were shipped to Russia through the Maldives in the year following Russia's invasion of Ukraine. This represents a significant increase from the year before the invasion, when there were no recorded shipments of chips from the Maldives to Russia.

The data also shows that the Maldives ranked second, after China including Hong Kong, in such imports of high value. This is particularly noteworthy given that the Maldives' total exports in 2021, excluding services, amounted to around $280 million. This means that the value of U.S. semiconductor shipments to Russia was equivalent to a significant 20% of the Maldives' total exports.

Experts have indicated that the Maldives semiconductor market is practically non-existent, further raising suspicions about the nature of these shipments.

The investigation also uncovered that 14 exporters were involved in sending semiconductors from the Maldives to Russia, and none of these companies appeared to be based in the Maldives itself. One prominent company, Mykines Corp., headquartered in London, was found to have exported approximately $40 million worth of chips, making up 80% of the total shipments identified.

The process of these shipments has shed light on the role of freight forwarders, who serve as intermediaries connecting shippers and transporters, and handle customs procedures on their behalf. According to sources in the shipping industry active in the Maldives, providing the name of a local forwarder in the “notify party” field of the waybill has been a key method for arranging such shipments.

As international authorities identify the Maldives as a transit point for shipments circumventing sanctions, the country is facing mounting pressure to address the matter. The United States has already accused a Maldivian freight forwarder, Intermodal Maldives, of aiding the re-export of aircraft parts to Russia in violation of U.S. sanctions