GAZ may be deprived of access to foreign-made units

The US Treasury has set a deadline for companies to wind down transactions with the Russian GAZ Group - this is May 24th, 2022. According to Reuters, the agency has distributed two so-called general licenses, which determine the "deadline". Before this date, any financial transactions with the GAZ Group and its subsidiaries must be terminated. The US Treasury has periodically issued general licenses to work with GAZ since the beginning of 2018, when the Russian automaker was on the list of companies against which targeted sanctions were imposed.

Until January 2022, the period of permits was 1 year, after January it was reduced to 90 days, but now it is down to 30 days. Moreover, Reuters, citing a representative of the US Treasury, notes that after May 24th, the agency does not intend to renew general licenses for the GAZ Group due to the ongoing conflict between Russia and Ukraine. American sanctions have a "cumulative effect": formally, the restrictions apply only to US residents, but in reality they apply to all Western companies. European legal entities that cooperate with companies on the US sanctions list are subject to secondary sanctions. GAZ has many Western companies in its pool of suppliers - for example, GAZelles and Valdai Next use Cummins diesel engines, some buses use Allison and ZF automatic transmissions and Bosch control electronics are used on diesel engines.