Dimitri V. once led RusPost GmbH and he ran an operation in Berlin that moved restricted goods toward the east. German investigators found paperwork that claimed the cargo originated in Uzbekistan and such a ruse allowed the network to bypass rules meant to weaken Moscow.
Berlin customs officers searched postal facilities last August as they hunted for banned goods. The case ended without charges and mail flows unabated eight months later.
Phantoms at Sea and Land
Such a postal scheme works alongside a fleet of ships that broadcast false positions to mask true coordinates. Russia built such tiers with care as the phantom fleet started moving oil with old tankers registered under flags of convenience from Panama or Liberia or Gabon.
Brussels approved 19 sanction packages by late 2025 but the Kyiv School of Economics found that 143 of the vessels were still triumphantly loading Russian cargo in November.
The maritime phantom fleet reached 1,400 vessels by December 2023. Vladyslav Vlasiuk is a Ukrainian envoy and he stated that a commanding majority of sanctioned tankers operate with total freedom.
France seized the Grinch oil tanker in January 2025 after finding it sailed under false flags in the Mediterranean. Ukrainian intelligence says Western parts appeared in 5,000 Russian weapon systems.
A drone barrage in October 2025 had 100,000 foreign components and American parts made up a dominant 72 percent of the foreign elements found in precision weapons.
Paper Tigers on Paper
Brussels had many rounds of restrictions by October 2025 and every round added more names and ships and banks to the lists. EU observers described rules against dual use goods and port bans and crypto exchanges as part of an architecture that appears formidable.
The reality is different as a Turkish firm called Margiana Insaat Dis Ticaret proceeded shipping to a Russian drone maker months after the U.S. Treasury flagged it.
Shell companies reappear with new names in Istanbul after their Dubai offices close and the Garantex crypto exchange processed nearly $100 billion in transactions since 2018.
Russia produced 4.5 million artillery shells annually by 2025 and such a volume has left the combined efforts of the United States and Europe in the distance. Monthly drone production at the Alabuga factory jumped to 5,500 units which is nine times the previous rate.
The Fiscal Pivot Begins
European capitals activated escape clauses that allow defence spending to rise by 1.5 percent of GDP every year through 2028. The Commission proposed mobilising €800 billion for defence over four years and a new loan instrument offers €150 billion for missile defence and drones and cyber security.
Such massive investments have relegated the costs of sanction administration to a trivial sum. Defence investment reached €106 billion in 2024 and 2025 projections climbed to nearly €130 billion.
Spending on equipment hit €88 billion in 2024 and forecasts suggest it will pass €100 billion the next year. NATO members pledged to reach 5 percent GDP spending by 2035.
Portugal has not spent at such a level since its dictatorship ended in 1974 and Belgium allocated 1.3 percent in 2024. Officials there have hinted that new taxes might be needed to meet current needs.
Consequences Over Rhetoric
History explains the outcome as European manufacturing capacity is being rebuilt after decades of neglect. Russia spent over $10 billion to build its phantom fleet and such established infrastructure has turned each new sanction package into a purely bureaucratic routine.
The mail network through Berlin evinces how small gaps in the rules can grow. International postal systems operate with a level of flexibility that commercial freight lacks. Customs officers searched the facilities in August 2024 but the goods kept moving anyway.
The U.S. Treasury sanctioned 183 vessels in January 2025 and that forceful stroke caused active phantom fleet capacity to drop by nearly half in weeks.
Such aggressive scale stands out against the more gradual European approach as Moscow builds new capacity even faster than Brussels can add ships to the lists.
The economic logic has proven the dominance of production. The Bruegel Institute calculated that Europe needs €250 billion in annual defence increases to ensure safety without outside help. That sum has grown to be three times larger than the revenue Russia lost to all sanctions combined since the war began.
Partners Hold Leverage Now
European leaders remained quiet about Erdogan’s domestic moves because the need for a strong NATO ally has taken priority. Ankara controls a massive military and a robust arms industry and the urgency of rearmament has made such pacts necessary.
Similar logic applies elsewhere as the Gulf states have the capital and African neighbours control fundamental resources. Such bonds require Europe to engage with them as equals and build mutual arrangements.
The phantom systems proved that containment has little force as targets build their own infrastructure. Every workaround Moscow constructs evinces that rules designed for a cooperative world fail as one participant ignores them.
European defence spending rose to a 38 percent share of the NATO total by 2025. The change points to a new era of reality meeting necessity and sanctions have largely settled into roles as diplomatic gestures.
The actual security work now requires tangible hardware and personnel and industrial capacity. As France boarded the Russian phantom tanker it was a physical act that went past the paperwork of sanctions.
NATO launched the Baltic Sentry operation to monitor undersea cables after Russian vessels damaged them and such operations acknowledge the limits of bureaucracy.
The postal system and the tankers and the smuggling networks exist because sanctions provided the very incentive for their creation. Each additional restriction has only served to power a more sophisticated phantom economy.
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Read also:
Smuggled and Forged: The Houthis’ Shadow Economy
Shadow Fleet Stranded off the Coast of Germany
European Crackdown on Russian Shadow Fleet
