Russia and Vietnam have developed a back-door method of concealing arms deal payments to avoid American and other Western sanctions, using the profits from joint oil and gas ventures to pay off defense contracts without any open transfers of cash through the global banking system, according to internal Vietnamese documents obtained by The Associated Press.
Under the system, Vietnam has purchased Russian military equipment including fighter jets, tanks and ships on credit from Moscow, then paid that credit back from its share of profits from a joint Vietnam-Russia oil company operating in Siberia. Such transactions are irregular in international financial markets and in this case are designed to keep cash quietly flowing even if sanctions aimed at ending Russia’s war on Ukraine are strengthened, the documents make clear.
The revelation comes at a precarious time when the U.S. is trying to strengthen ties with Vietnam as a bulwark against growing Chinese assertiveness in Southeast Asia, and has ongoing trade negotiations with Hanoi after the White House imposed 20% tariffs, while at the same time President Donald Trump is threatening even more stringent sanctions on Moscow.
The European Union has also added a raft of new sanctions to pressure Russian President Vladimir Putin to end the war, and Trump recently issued an executive order doubling tariffs on India to 50% to pressure New Delhi to stop buying Russian oil and military equipment, which he said was helping enable the war against Ukraine.
The Trump Organization, the president’s family business, also broke ground earlier this year on a $1.5 billion luxury golf complex outside the capital, Hanoi, after Vietnam fast-tracked approval. The president’s sons run the organization, but financial disclosures in June indicated that Trump himself benefits from many of its activities.
News that the unorthodox arrangement was in the works leaked in 2023. But rather than shutting it down, an internal document from last year reveals that Russia and Vietnam finalized and implemented it, while also making agreements to ensure it would produce sufficient funds for future military purchases.
The Vietnamese government document that was leaked in 2023 and the newer government document from last year were provided to The Associated Press by an official who said that he was part of a faction opposed to closer ties to Russia at the risk of jeopardizing the growing relationship with Washington. He provided the documents on condition of anonymity to protect himself from possible reprisals from Vietnam’s authoritarian government.
An AP reporter displays an excerpt from a June 11, 2024 memo from Vietnam’s Oil and Gas Group (PVN) to the Ministry of Industry and Trade detailing an arrangement to avoid potential American sanctions when purchasing Russian defense goods, in Bangkok, Thailand, on Sept. 16, 2025. (AP Photo/Sakchai Lalit)
The U.S. State Department refused to comment specifically on the documents or the payment plan designed to skirt American sanctions, referring comments to the Vietnamese government. It reiterated broadly, however, that “our sanctions remain in place.”
“Those engaging in certain transactions or activities with sanctioned entities and individuals may expose themselves to sanctions risk or be subject to an enforcement action,” the State Department said in an email to the AP this week.
