Michelin Circumvents Sanctions: A Detailed Look Into The Tire Giant’s Operations

Introduction

On March 15, 2022, Michelin, the renowned French tire manufacturer, officially announced its withdrawal from the Russian market. This decision led to the cessation of production in Davydovo and halted tire exports to Russia. Despite this public stance, it appears that Michelin has found ways to continue its business in Russia, circumventing international sanctions.

The Official Exit and Reality

Following the sanctions, many tire manufacturers stopped supplying their products to Russia. Michelin, however, seemed to see an opportunity where others saw restrictions. Leveraging its established network, Michelin has managed to sustain its market presence in Russia, albeit through indirect channels.

The Role of TATKO and KAZ T-REMA

Michelin’s strategy revolves around its partnership with the Turkish conglomerate TATKO T.A.S., which has been an official distributor since 2004. To expand its reach, TATKO T.A.S. founded a subsidiary in Kazakhstan in 2008, named KAZ T-REMA International.

In 2023, Michelin utilized this network to navigate around the sanctions. Through TATKO T.A.S. and KAZ T-REMA International, Michelin continued to supply tires to Russia. In the first half of 2023 alone, TATKO T.A.S. and its Kazakh subsidiary sold Michelin tires worth $34.119 million to Russia. The second half of the year saw an additional $26.735 million in sales. Altogether, Michelin managed to sell tires worth $60.85 million to Russia in 2023, as confirmed by customs data from the Russian Federation.

The Ongoing Sanction Evasion

This supply chain remains active, allowing Michelin to bypass sanctions and maintain its revenue stream from the Russian market. This operation persists despite the European Parliament’s directive to criminalize the evasion of EU sanctions.

Conclusion

Michelin’s actions, facilitated by TATKO T.A.S. and KAZ T-REMA International, highlight a significant breach of international sanctions. The desire for profit appears to overshadow legal and ethical considerations, posing serious questions about the enforcement and effectiveness of current sanctions.