In 2024, individuals transferred approximately $5.8 billion USD to Armenia through the banking system. According to data from the Central Bank of Armenia (CBA), this represents a 2.5% increase compared to 2023. Interestingly, while these transfers have flowed into Armenia, a comparable volume has also exited the country. As previously discussed, the ongoing Russia-Ukraine conflict, now in its third year, has turned Armenia into a transit hub for trade between Russia and Western countries due to restrictions on direct commerce between those regions.

In 2023, exports from Armenia to Russia totaled $3.6 billion, according to the Armenian Customs Service. Our analysis shows that many of these exports were products manufactured in other countries. This suggests that Russia may be using Armenia’s economic space to bypass Western sanctions. A similar pattern is observed in financial transfers to Armenia. To understand this trend better, let us examine the geographic breakdown of the $5.8 billion USD transferred to Armenia by individuals in 2024.

Who Is Sending Money to Armenia?

Russia, of course, is the leader: 65% of the $5.8 billion transferred to Armenia came from Russia. As Armenia’s strategic partner, Russia has always led in remittance volumes, and this has a logical explanation: Armenian migrant workers in Russia regularly send money back home to support their families living in Armenia. However, according to statistics from the Central Bank of Armenia (CBA), much of the money transferred into Armenia was not spent or invested within the country. Instead, these funds were subsequently moved to other countries. This has led to the assumption that Russia may be using Armenia's economic space to circumvent Western sanctions. The United States follows Russia on the list.

Armenia has a large diaspora in the U.S., estimated between 600,000 and 800,000 people. As a result, transfers from the United States have consistently made up a significant share of total remittances. Next on the list are Switzerland, the Isle of Man (a known offshore zone), and the United Arab Emirates (UAE).

Although transfers from the Isle of Man and the UAE are much smaller in volume compared to those from Russia and the U.S., what stands out is that Armenia has become increasingly attractive to the Isle of Man since 2022. Before that, transfers from the Isle were virtually nonexistent.

Where Does the Money Flowing Into Armenia Go?

While Russia leads in inbound remittances to Armenia, the picture changes when it comes to outbound financial flows. The United Arab Emirates (UAE) tops the list of destinations for money leaving Armenia. Approximately 20% of the $5.8 billion transferred into Armenia was subsequently sent to the UAE. Following that, 16% was transferred back to Russia, 13.5% to the United States, 10.5% to Switzerland, and 4% to Monaco.

Publicly available data does not reveal the specific purposes of these transfers. However, based on the timing and flow patterns, it is reasonable to assume that Russian relocants (relocated individuals) have played a significant role in this trend.

Experts also link this financial inflow and outflow to re-exports, particularly involving the trade of gold and diamonds, which has been carried out through Armenia’s territory. This adds another layer to the argument that Armenia is increasingly being used as a conduit in international trade routes, possibly to bypass certain regulatory or geopolitical restrictions.

The Structure of Transfers Has Changed

According to Armine Petrosyan, Senior Researcher at the ACSES Research Center and an economist, the inflow figures indicate a clear link to the Russia-Ukraine conflict and the events that followed. “Since the start of the Russia-Ukraine war in 2022, the volume of money entering Armenia through the banking system has increased sharply. We have sold something, exported it, and in return received payment. In other words, the inflow is tied to exports,” says Petrosyan.

Both the inflows and outflows have included commercial and non-commercial transfers. Commercial transactions include, for example, the purchase of movable and immovable property, while non-commercial transfers are typically direct financial remittances and social benefits. According to the economist’s research, prior to 2022, the majority of net inflows were for non-commercial purposes. Since 2022, however, there has been a sharp shift in the structure of transfers: 80% are now commercial in nature.

The public only has access to limited details—such as the amount, currency, and geographic source of the transfers. However, it’s not possible to determine from public data, for example, that a certain amount was sent to the UAE specifically for real estate purchases. What is visible is the purpose breakdown—what portion of the transfers was commercial and what portion was non-commercial. “When we say that most of the inflow was commercial, it means we sold something and were paid for it. And when we see that most of this came from Russia, in rubles, and was marked as commercial, it clearly indicates a connection with re-exports. It's obvious that these inflows occurred in the context of re-export activity,” Petrosyan explains.

The economist also notes that non-commercial transfers have grown as well, partially due to financial inflows from Russian relocants who moved to Armenia. Many of these individuals continued working remotely for international organizations located outside Armenia and naturally received their salaries through Armenian banks. This, too, contributed to the overall rise in transfers. This same trend has continued throughout 2022–2024. The expert attributes the growth in commercial inflows largely to re-export activities, which is why inflows from Russia have increased so significantly.

The Link Between Transfers and Re-Exports

Aghasi Tavadyan, an expert at the Amberd Research Center, also emphasizes that the majority of money transfers from Russia to Armenia before 2021 were for non-commercial purposes. However, since 2022, the trend has shifted: nearly 80% of the transfers have become commercial in nature, while non-commercial transactions have declined over time. According to him, the number of Armenian labor migrants going to Russia is gradually decreasing, which in turn has led to a reduction in non-commercial remittances.

“In 2022, exports to Russia tripled, and bank transfers from Russia increased by a factor of 4.5—mainly due to commercial transfers,” says the economist. He explains that there were distinct stages in Armenia-Russia monetary and trade relations. In early 2022, during the initial phase of the Russia-Ukraine conflict, there was a sharp outflow of capital and labor from Russia to Armenia. However, by mid-2023, that influx had slowed, and a new trend emerged—centered around gold exports.

According to Tavadyan, the sharpest rise in transfers was recorded from Russia. In 2021—before the conflict began—only 41% of total transfers came from Russia, and total remittances to Armenia stood at $2.1 billion. By 2022, transfers had increased 2.5 times, reaching $5.2 billion, with the majority coming from Russia. “Armenia wasn’t able to fully absorb these large sums—most of the funds flowed into the construction sector. But now we’re seeing the opposite dynamic: inflows are starting to decline, while outflows from Armenia are increasing,” notes the economist.

Tavadyan also highlights significant changes in Armenia’s export data: since 2021, the sector has seen rapid growth, with exports increasing by a factor of 4.5. He attributes this primarily to re-exports, especially of gold. The explosive growth in 2022–2023 was largely driven by short-term re-exports of gold that had been brought into Armenia from Russia and then sent to other countries. He reminds us that under Western sanctions, gold and diamonds have become alternative payment instruments for Russia. His analysis shows that nearly 90% of the gold exported from Russia passed through Armenia, which has distorted Armenia’s official export statistics. Armenia has thus become a financial transit point for Russia. The re-export of gold and diamonds has inflated Armenia’s export figures and concealed the fact that traditional export directions—such as to the Eurasian Economic Union (EAEU) and the European Union—have actually declined.

Armenia has found itself at the heart of a complex financial and trade ecosystem shaped by war, sanctions, and relocation. While remittances and exports have surged, a significant portion of this activity is not rooted in domestic productivity but in Armenia’s strategic use as a transit point. With gold and diamond re-exports, rising commercial transactions, and money quickly moving in and out of the country, Armenia's financial and economic indicators may look strong—but they rest on shifting geopolitical sands. As global tensions evolve, so too will Armenia’s role in the regional economic chessboard.

Contributed by Ani Grigoryan, the founder and editor of CivilNetCheck—a fact-checking department at CivilNet online TV.