Experts in international sanctions are concerned that Sri Lanka, which is undergoing economic recovery after the crisis, risks becoming an unexpected channel for circumventing Western restrictions and indirectly financing the Russian military machine in the conflict with Ukraine.
According to analysts, close trade ties between Colombo and Moscow, as well as Sri Lanka’s neutral stance on the war, create potential loopholes. In recent years, Russia has remained one of the island’s key partners: tea exports to Russia account for a significant share, and tourist flows from Russia help replenish foreign exchange reserves. Despite Western sanctions, Sri Lanka continues to explore opportunities to purchase Russian oil and fertilizers at preferential prices, allowing Moscow to obtain currency outside of direct channels.
In addition, hundreds of Sri Lankan citizens, mainly former military personnel, are participating in hostilities on the side of Russia as mercenaries, receiving high salaries (up to $3,000 per month). According to sources, these payments may be partially reinvested in the island’s economy through the families of the fighters, creating an indirect inflow of funds. The Sri Lankan authorities have repeatedly asked Moscow for compensation for the dead and wounded but continue to issue visas to Russians in large numbers.
“Sri Lanka has not joined the sanctions against Russia and maintains a pragmatic approach. This could make the country a convenient ‘gray’ channel for financial flows, especially at a time when traditional routes for Moscow are narrowing,” noted one expert on the sanction’s regime.
Officially, Colombo declares neutrality and a focus on economic recovery. However, observers warn that if the West increases pressure, the island risks falling under secondary sanctions, which would hit its fragile GDP growth.
International organizations are monitoring developments. While there is no direct evidence of systematic circumvention of sanctions, risks are growing amid the ongoing conflict.