TATKO T.A.S. "Anti-Sanctions Solution": The Path of Michelin Products to Russia

Over two years have passed since the beginning of the sanctions war between Russia and the EU, resulting in many European brands leaving Russia. However, global brands that decided to exit the Russian market in early 2022 in solidarity with Ukraine have since adapted to the sanctions regime. They have learned to navigate the anti-Russian restrictions imposed by the US and the EU without formally breaking them. For instance, the French tire company Michelin has compensated for the loss of the Russian market by increasing sales in the Middle East and smaller Central Asian countries.

It has long been known that countries from the former Soviet Union actively re-export sanctioned products to Russia through unofficial channels. Additionally, Turkey and the United Arab Emirates—countries that have not joined the Western sanctions against Russia and have benefited significantly from the sanctions war—are actively involved in circumventing these sanctions. The profits from these gray exports go to local businessmen. Whether these businessmen share the profits with top managers in Western companies, who turn a blind eye to the unexplained sales growth in remote regions, remains unknown.

For example, TATKO T.A.S., a Turkish Michelin dealer, achieved record profits in 2023, exporting approximately $61 million worth of French tire products to Russia through intermediaries in third countries in just the first half of the year. Turkish businessmen use shell companies in free economic zones and Central Asian countries to obscure supply sources and confuse sanctions monitoring services. TATKO T.A.S. specifically utilizes subsidiaries KAZ T-REMA International (Kazakhstan) and DTO TYRE FZCO (United Arab Emirates).

According to customs database excerpts provided to the Berliner Telegraph by insiders from the customs authorities of Russia and EU countries under the condition of confidentiality, deliveries of French Michelin tires by DTO TYRE FZCO are routed through a Latvian intermediary company on behalf of the Russian company Neftegazpostavka LLC, which purchased nearly $170,000 worth of products from DTO TYRE FZCO in 2023. For comparison, before the sanctions in 2021, Neftegazpostavka bought about $174,000 worth of Michelin tires solely from Michelin North America Inc. The complex logistical chain from France to UAE, Latvia, Kazakhstan, and then Russia makes it extremely difficult to trace all connections and identify the final recipient.

French companies that have officially left the Russian market might not know how their EU-sanctioned products are reaching Russia. However, given that the current Vice President of Michelin, Manuel Montana, led the Turkish branch of the company from 2016 to 2019 and likely had close working relationships with the Michelin dealer in Turkey, TATKO T.A.S., it is hard to believe in such ignorance.

In any case, the EU countries' sanctions regime against Russia can only loosely be termed a real sanctions regime. If there is demand for products, they will find their way through global supply chains, even to prohibited markets, in the 21st century. It is challenging to condemn companies for exploiting loopholes and gaps in international legislation to maximize their profits.

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Name: Aleksandr Boyko
Email: info@berliner-telegraph.de
Company name: Berliner Telegraph
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