Kyrgyzstan liquidates companies to address EU sanctions circumvention concerns

Kyrgyzstan has begun liquidating companies and severing banking ties to mitigate risks associated with the circumvention of European Union sanctions on Russia. Following pressure from the EU, the Kyrgyz government ordered the closure of 19 companies in a single week and disconnected 144 firms from state banking services.

The shift in policy follows a period of denial from Kyrgyz leadership. President Sadyr Japarov previously dismissed claims of sanctions evasion as being based on “false information” and characterized sanctions against Kyrgyz banks as “politicized.” However, trade data indicated a significant surge in the movement of restricted items; between January and October 2025, imports of EU Common High Priority dual-use goods to Kyrgyzstan rose by 800%, while exports of those same items to Russia increased by 1,200%.

The EU’s actions were prompted by findings from sanctions envoy David O’Sullivan, who noted that goods were being imported into Kyrgyzstan for the “sole purpose of being re-exported to Russia.” In April 2025, the EU utilized its anti-circumvention tool for the first time to target Kyrgyzstan, restricting the transfer of specific sanctioned goods and technologies to the country to prevent them from reaching the Russian military.