Just before he was named as President-elect Donald Trump’s national security advisor, Representative Mike Waltz (R-FL) called for enforcing the sanctions on Russia to end Moscow’s war against Ukraine. He believes flooding the global market with American oil and gas will bring global energy prices down and weaken Moscow’s war machine.

While such a strategy will take a year or two to bring about the desired result, the Trump administration can take immediate measures to undercut Moscow’s ability to circumvent existing trade sanctions, especially in strategic regions such as Central Asia.

Squeezed between Russia and China, Central Asia is not only subject to influence from both neighbors but also has acted as a transit corridor for sanctioned Western goods to Russia ever since its invasion of Ukraine. It appears that one state, Kyrgyzstan, has even prioritized developing new financial mechanisms to evade financial restrictions on payments to and from Russia.

The Trump administration could re-establish the United States as a more consequential player in Central Asia and use this as leverage with Moscow and Beijing in handling strategic priorities in Ukraine, the Middle East, and Taiwan. Washington’s involvement in Central Asia has dwindled under the Biden administration, especially following the chaotic exit from Afghanistan. 

Since the 1990s, Washington held significant sway in Central Asia, with multibillion investments in Kazakhstan’s oil, gas, and minerals. After 9/11, the region became central to U.S. national security interests, with air bases at Karshi in Uzbekistan and Manas in Kyrgyzstan that served NATO troops in Afghanistan.

However, recent U.S. foreign direct investment (FDI) in the region is modest at best. The volume of aid to the five post-Soviet Central Asian countries (Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan) dropped from $435 million in 2012 to $226 million in 2023. Assistance plummeted to only $63 million obligated in 2024 as humanitarian aid to Ukraine rapidly increased. At the same time, China has committed billions of dollars to the region through its Belt and Road Initiative, including $500 million in grants, and has offered generous loans, with some countries now owing over half of their sovereign debt to Beijing.

While Russia’s invasion of Ukraine was expected to weaken its influence in Central Asia, nearly three years into the war, Moscow is seeking to tighten its grip. Remittance receipts from labor migrants in Russia still account for 20 to 50 percent of GDP in some Central Asian countries. Russia is ramping up its multi-billion-dollar energy projects, from electricity exports and gas transit to new nuclear reactors in Uzbekistan, further increasing the region’s dependency on Moscow. Assisting Russia in sanctions evasion has also become a lucrative business for the regional elite.

A notable example is Kyrgyzstan, once hailed in Washington as a “beacon of democracy” in Central Asia, with its fragile but relatively fair and competitive political system. But the great promise Kyrgyzstan offered has now faded. The U.S. military was pushed out of the country in 2014, and Kyrgyzstan is considered Moscow’s client state, with a semi-autocratic regime helping the Kremlin bypass sanctions.

Since the beginning of 2022, when the members of the Organization for Economic Cooperation and Development (OECD) stopped direct trade with Russia, Kyrgyzstan has miraculously experienced an unparalleled 1,026 percent growth in imports from the EU, while the volume of freight carried within the country surged by 29.7 percent compared to 2021. The primary business scheme for sanctions-busting involves bogus import or “false invoicing,” in which Kyrgyz companies order goods that are never intended to arrive in the country physically but are promptly resold to Russian buyers or “lost” in transit.

Last year, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned several Kyrgyz companies caught facilitating bogus deals. Earlier this year, it threatened to sanction Kyrgyz banks working with Russian counterparts and facilitating payments for illicit foreign trade. In an interview with Russian state television in May, Kyrgyzstan’s Prime Minister Akylbek Japarov, who previously declared that he was not afraid of sanctions, answered a question about his policy response to international restrictions imposed on dealing with Russia’s financial sector by saying: “We must simply get ahead of all these sanctions, all these permissions, prohibitions, and so on. That is, we need financial technology companies that provide timely transfers and settlements between our countries."

This was not idle speculation. In September, the Kyrgyz authorities imposed a “one-year ban” on banking transactions for export-import payments by or to private firms when the goods or services do not physically enter the country. The government created the state-owned “Trading Company of the Kyrgyz Republic”—in effect, a monopoly export-import operator—to handle such deals for a “modest” commission of 2–6 percent. Experts anticipate that this company will use the country’s two largest state-owned banks, Aiyl and Eldik, as well as the newly registered private bank Asman with Russian connections, to facilitate payments through alternative national currencies and cryptocurrencies. None of the institutions in question have responded to requests for comment from the author on their sanctions compliance practices. Local experts warn that flagrant non-compliance could trigger a wave of secondary sanctions, potentially leading to Kyrgyzstan's financial isolation and the loss of access to international financial markets.

While secondary sanctions, including personal penalties against officials, either engaged in blatant sanctions evasion or openly advocating for it, are essential, they are unlikely to suffice. The regional political and business elites must see a strong alternative to Russia and China. Offering economic incentives that compete with Beijing and Moscow’s carrots while enhancing security cooperation is essential for the United States to reestablish its strategic foothold in Central Asia.

Given the capital-intensive character of natural resource development (a remarkable potential in this region), this may require substantial investment. Still, it will still be a small fraction of what the United States currently allocates to Europe and the Middle East. The Trump administration must signal that America is back in the region—and this time, in earnest.

Margarita Assenova is a Senior Fellow at The Jamestown Foundation. She is a regular contributor to the Jamestown publication Eurasia Daily Monitor on political and energy security developments in the Balkans and Central Asia. Follow her on X: @M_Assenova. 

Image: Vladimir Tretyakov / Shutterstock.com