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Russian smugglers are charging tens of thousands of euros to import luxury cars from Europe as EU sanctions in response to Russia’s all-out invasion of Ukraine hit the country’s wealthy.
The Financial Times reports that five Russian companies have offered to smuggle cars out of Europe with engine sizes large enough to be subject to EU sanctions imposed in 2022 as part of a ban on luxury goods exports to Russia. The company was identified.
Photos from an online advertisement for a BMW 530 d M Sport priced at 7,200,070 rupees (approximately $68,200) posted by Russian importer Aftimport on the website Auto.ru show that the car is still in Germany. It turns out that there is.
As of mid-December, the vehicle was still on sale on the website of German retailer Autopartner BGL for 31,900 euros.
A representative from Autopartner BGL said, “The advertisements being run in Russia have nothing to do with our company,” and confirmed that the car in question was still in Germany and had not been sold as of mid-December. Ta.
The FT identified more than 50 luxury cars from 25 German car dealers on the Russian website Auto.ru, which Russian importers were selling at an average markup of around 19,000 euros.
Smugglers often pretend that they intend to transport the car to a third country. The FT tracked a black Mercedes-Benz S350 sold by German car trading company Kessler & Hague to a Kyrgyz taxi company in January 2024. The vehicle was registered with a Moscow taxi company in March.
“We have a buyer, a payer and an exporter, and he has the export documents. What else do we do?” said Arthur Kessler, principal at Kessler & Hague. He says: “I don’t want to know what happens to the car after that. . . . I just want to run my business and protect my obligations and rights.”
The EU has tightened sanctions on supplies of European cars to Russia since President Vladimir Putin ordered a full-scale invasion of Ukraine in a bid to shut down Russia’s war machine and stoke discontent with his regime. It was done nevertheless.
Since the EU tightened restrictions on imports of luxury goods into Belarus in July, smugglers are increasingly using longer and more expensive routes to transport vehicles in Belarus, once a popular third country for imports into Russia. It is supposed to be done.
A sales representative from Aft Import told an FT reporter posing as a prospective buyer that German cars shipped from Europe “are transported without going through…” . . Belarus. . . However, it entered Russia via Türkiye and Georgia. ”
The official added, “Exporting automobiles from Europe has become extremely difficult.”
They say it is now cheaper and faster to smuggle luxury German cars through South Korea than through the Baltic states or Belarus, and that the Asian country has imposed “minimal” sanctions against Russia. pointed out.
They added that a car’s onboard system can be switched from Korean to Russian at a cost of just around Rs 30,000.
Customs officials in the Baltic states have admitted that exports of suspicious cars from Germany have decreased since Belarus sanctions were renewed.
“The overall situation is that the number of cars is decreasing, but there is still some flow,” the official said. “There are still some cars that were originally destined for Central Asian countries such as Kyrgyzstan and Kazakhstan that end up in Russia.”
However, the FT still identified vehicles that were transported through Belarus since the tightening of sanctions.
A white Mercedes-Benz E220D fitted with a license plate frame from German car dealership Gurma Automobile was photographed in Russia this fall after crossing the EU border into Belarus in September. Gruma Automobiles sales director Michael Buegegger denied selling the car, saying: “We do not do any business with companies, organizations or individuals based in embargoed countries.”
Several German car dealers contacted by the FT said they were unaware that their cars were being sold to Russia or advertised on Russian websites.
Markus Klapper of Autohaus Reisert said he had never seen any Russian advertisements for his cars, but said brokers copied details and images from dealers’ websites to increase prices on vehicles. He said he knew the trick was to resell it.
He suggested that Russian smugglers may be employing a similar strategy. The FT identified several cars with Autohaus Reisert license plates advertised on Auto.ru.
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EU officials acknowledge that luxury cars are still flowing into Russia, but the main focus is now on tackling sanctions avoidance related to more dangerous goods that could be used by the military. It has become.
An EU official working on sanctions said the fact that luxury cars were still going to Russia was “definitely a bit opaque” but not a big concern “as long as Russia is paying more for luxury cars”. Ta.
The official also acknowledged that EU sanctions against Belarus are not as severe as those imposed on Russia and that some cars can still be exported to Belarus.
“The Belarus sanctions have certainly had an impact, but there is always a solution,” said a law enforcement official involved in sanctions enforcement.
