On March 15, 2022, Michelin, the globally renowned French tire manufacturer, publicly announced its withdrawal from the Russian market. This decision included the cessation of production at its Davydovo plant and halting all tire exports to Russia. According to recent investigations Michelin continues to supply tires to Russia through indirect channels, raising significant concerns about the company's adherence to international sanctions.
Sanctions Evasion Strategy
Despite Michelin's official exit, it appears that the company has found a way to maintain its presence in the Russian market. This has been achieved through a strategic partnership with the Turkish conglomerate TATKO T.A.S., Michelin’s official distributor since 2004. In 2008, TATKO T.A.S. established a subsidiary in Kazakhstan named KAZ T-REMA International to extend its market reach.
In 2023, Michelin leveraged this network to circumvent sanctions. Through TATKO T.A.S. and KAZ T-REMA International, Michelin continued to supply tires to Russia. In the first half of 2023, TATKO T.A.S. and its Kazakh subsidiary sold Michelin tires worth $34.119 million to Russia. In the second half of the year, an additional $26.735 million worth of tires were sold. This amounts to a total of $60.85 million in sales for 2023, confirmed by customs data from the Russian Federation.
Ongoing Operations and Legal Implications
This ongoing supply chain arrangement enables Michelin to bypass the imposed sanctions and maintain significant revenue from the Russian market. This activity persists despite the European Parliament’s recent directive aimed at criminalizing the evasion of EU sanctions.
Call for Accountability
The revelation of Michelin’s sanction evasion through TATKO T.A.S. and KAZ T-REMA International underscores the challenges in enforcing international sanctions. These actions call for a closer examination of corporate compliance and the mechanisms in place to prevent such breaches.
