Turkey's secret coal imports from annexed Ukrainian regions exposed

Recent data has exposed a covert trade route funneling coal from territories in Ukraine annexed by Russia to NATO member Turkey, circumventing the trade restrictions imposed by other nations in response to Russia’s invasion of Ukraine in February 2022, Reuters reported on Tuesday.

The data revealed that Turkey has imported coal worth at least $14.3 million this year, amounting to approximately 160,400 tonnes of coal and originating from the embattled regions of Donetsk and Luhansk, according to the data.

Three manufacturers confirmed the exports to Reuters, solidifying Turkey's position as the prime destination, absorbing 95% of the coal shipments from these annexed regions during this timeframe. This information comes amidst the backdrop of Turkey's burgeoning dependency on coal, showcasing a spike of a quarter in electricity generation from imported coal within the first half of this year as compared to the same period in 2022.

Despite Turkey's vocal support for Ukraine's territorial integrity and its instrumental role in fostering a now-defunct agreement facilitating Ukrainian grain exports via the Black Sea, the recent data cast a shadow on Ankara’s stance. Neither Turkey's trade ministry nor its customs directorate have offered any comments regarding these shipments.

The coal business, intrinsically secretive, has seen a network of sellers registered both in Russia and in the annexed territories of Ukraine, as corroborated by Interfax news agency's Spark database. Meanwhile, the buyers have been traced back to offshore jurisdictions including Belize and the British Virgin Islands, alongside Hong Kong and the UAE, with no Turkish firms enlisted.

Despite concerted efforts, Reuters could not ascertain the final beneficiaries of these transactions, nor establish contact with the buyers.
Further digging unveils statements from November by Vitaliy Khotsenko, the then-head of the Donetsk People's Republic (DNR), claiming the region’s coal exports to Turkey, which allegedly found their way to markets in Middle East and Africa. Yet, the customs data for 2022 remains devoid of any concrete proof supporting these claims.

This intricate web of coal trade showcases a maze of obscured routes, with some consignments funneled through the southern Russian city of Rostov and others through the Black Sea port of Novorossiisk, both of which maintain rail connections to Donetsk and Luhansk. The extent to which Turkey served as a re-export hub in this clandestine trade network remains undetermined.
While the US and the EU have enacted stringent sanctions prohibiting trade with the territories under scrutiny since Russia’s invasion, Turkey continues to defy these impositions. The US, in particular, has been vigilant, imposing sanctions on firms accused of abetting Moscow in its campaign against Ukraine.

These transactions have not escaped the eyes of the US State Department, though they refrained from commenting specifically on the Turkish shipments, vehemently opposing any efforts by Russia to exploit Ukraine's natural assets for profit. Meanwhile, the European Commission has maintained a reserved stance on the matter.

Turkey’s embroilment in this controversial trade comes after Russia formalized its annexation of Donetsk and Luhansk regions in September 2022, a move broadly condemned as unlawful by Ukraine, its Western allies, and a majority of the UN General Assembly, Turkey included.

Companies involved in the coal trade have mostly remained tight-lipped about their operations. Notable names include Vostokugol, a major player in the annexed territories responsible for a significant portion of the coal volumes shipped to Turkey, and Nedra-06, another active entity in the trade network. Directors and officials from these firms have either refrained from commenting or have remained elusive regarding the transactions, citing commercial secrecy.

As this trade route comes under increasing scrutiny, the opacity surrounding the identities and operations of buyers like Brig Management LTD and Green Rabbit LTD adds another layer of complexity to an already controversial situation. Reuters' investigative foray into their operations has met with a wall of silence, with requests for information being denied and physical addresses yielding no substantial leads.

The coal narrative thus unravels as a clandestine operation shrouded in secrecy, with entities like Brig Management LTD and Green Rabbit LTD emerging as the leading players in the coal transactions valued at millions of dollars. Amidst the echoes of commercial secrecy, the narrative hints at a broader geopolitical dynamic at play, where national allegiances and international sanctions are being challenged by covert commercial interests.