Russian dealers are importing luxury cars from Europe despite the sanctions

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Russian dealers are charging tens of thousands of euros to buy luxury cars from Europe, as EU sanctions over Moscow’s all-out invasion of Ukraine hit the country’s wealthy.

The Financial Times has identified five Russian companies that are willing to smuggle cars from Europe with engines large enough to fit under them EU sanctions, which were imposed in 2022 as part of a ban on the export of luxury goods to the country.

Pictures of an online ad from Russian importer “AutoImport” on the Auto.ru website for a BMW 530 d M Sport priced at Rbs7,200,070 ($68,200) show that the car is still in Germany.

As of mid-December, the car was being sold for €31,900 on the website of German dealer Autopartner BGL.

“The ads being made in Russia have nothing to do with us,” said a representative of Autopartner BGL, confirming that the car in question was still in Germany and had not been sold from the center. of December.

The FT selected more than 50 luxury cars from 25 different German dealerships on the Russian website Auto.ru, which the Russian importers were offering for a total of around €19,000.

Smugglers often present themselves as willing to send a car to a third country. The FT tracked down a black Mercedes-Benz S350 sold in January 2024 to a Kyrgyz cab company by German car dealer Kessler & Haag. The car was registered in March to a Moscow taxi company.

“We have a buyer, a payer, a seller, he has foreign documents. What else should we do?” said Artur Kessler, representative of Kessler & Haag. “I don’t want to know what happens to the cars after . . . I just want to run my business, according to my duties and rights. ”

European car supply to Russia it comes despite increasing EU sanctions since President Vladimir Putin ordered a full-scale invasion of Ukraine, in an effort to strangle Moscow’s war machine and stoke discontent with the regime.

Since the EU tightened restrictions in July on luxury goods entering Belarus – once Russia’s most popular third-party destination – exporters have been using longer and more expensive routes heavy to drive vehicles.

A sales representative for AvtoImport told an FT reporter posing as a buyer that German cars imported from Europe “are not driven . . . Belarus. . . but through Turkey, Georgia, and into Russia”.

The person added: “Exporting cars from Europe has become a big challenge.”

They said it was now cheaper and faster to ship high-end German cars through South Korea than through the Baltics and Belarus, noting that the Asian country had imposed “minimal” sanctions on Russia.

They added that, at a cost of only Rbs30,000, the systems in the car can be switched from Korean to Russian.

A customs official in the Baltic states has confirmed that suspicious vehicles from Germany have decreased since sanctions on Belarus were upgraded.

“The general situation is that the number of vehicles (are) decreasing, but there is still some flow,” the official said. There are still cars that end up in Russia, which were previously sent to Central Asian countries” such as Kyrgyzstan and Kazakhstan.

However, the FT is still identifying vehicles that have been driven in Belarus since the imposition of sanctions.

A white Mercedes-Benz E220D with a framed license plate from German car dealer Gruma Automobile was seized in Russia this autumn, after it crossed the EU’s external border in September into Belarus. Gruma Automobile’s sales manager, Michael Vieweger, refused to sell the car, saying “we do not do business with companies, organizations or people living in banned countries”.

Several German car dealers contacted the FT saying they were unaware their cars were being sold in Russia or advertised on Russian websites.

Autohaus Reisert’s Markus Klapper said he had never seen Russian ads for his cars, but was aware of a trick in which dealers copy information and images from dealer websites so they can sell cars again.

He suggested that Russian hackers may use a similar strategy. The FT identified several vehicles with Autohaus Reisert license plates published on Auto.ru.

EU officials are aware that luxury cars are still ending up in Russia, but their main focus now is to deal with and avoid sanctions related to highly dangerous goods that could be used by the military.

An EU sanctions official said the fact that luxury cars were ending up in Russia was “undoubtedly shady”, but not a big deal “as long as Russia is paying more for let’s go”.

The official also acknowledged that the EU’s sanctions against Belarus are not as strict as those it had imposed on Russia, meaning that some vehicles could still be exported to Belarus.

A law enforcement officer in charge of sanctions enforcement said “sanctions on Belarus have had an effect – but they will always have a way out”.