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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 Moscow's large-scale invasion of Ukraine hit the country's wealthy.
The Financial Times has identified five Russian companies offering to smuggle cars from Europe with sufficient engine sizes for entry European Union Sanctions imposed in 2022 as part of a ban on the export of luxury goods to the country.
Photos of an online ad from Russian importer AvtoImport on Auto.ru for a BMW 530 d M Sport priced at Rs 7,200,070 ($68,200) show the car is still in Germany.
As of mid-December, the car was still for sale for €31,900 on the website of German seller Autopartner BGL.
A representative of Autopartner BGL said: “The ads shown in Russia have nothing to do with us,” stressing that the car in question is still in Germany and has not been sold until mid-December.
The Financial Times identified more than 50 luxury cars from 25 different German car dealerships on the Russian website Auto.ru, which Russian importers were offering at an average profit margin of around €19,000.
Smugglers often present themselves as intending to ship the vehicle to a third country. The Financial Times tracked down a black Mercedes-Benz S350 that was sold in January 2024 to a Kyrgyz taxi company by German car dealer Kessler & Haag. The car was registered last March with a taxi company in Moscow.
“We have a buyer, a payer, an exporter, and they have export documents. What should we do?” “I don't want to know what happens to the cars next,” said Artur Kessler, Kessler & Haag's representative. . . “I just want to run my business and abide by my duties and rights.”
Supplying European cars to Russia This comes despite the European Union tightening sanctions since President Vladimir Putin ordered a large-scale invasion of Ukraine, in an attempt to stifle Moscow's war machine and stir discontent with the regime.
Since the European Union tightened restrictions in July on the entry of luxury goods into Belarus – once a popular third country through which Russia could be imported – smugglers have been using increasingly long and expensive routes to ship vehicles.
An AvtoImport sales representative, posing as a potential buyer, told a Financial Times reporter that German cars shipped from Europe “are not transported through . . . Belarus . . . but through Turkey and Georgia and then to Russia.”
“Exporting cars from Europe has become very difficult,” the person added.
They said that smuggling luxury German cars through South Korea is now cheaper and faster than smuggling them through the Baltic countries and Belarus, noting that the Asian country imposed “minimum” sanctions on Russia.
For a cost of only about Rs 30,000, the on-board systems of the car can be switched from Korean to Russian, they added.
A customs official in one of the Baltic countries confirmed that exports of suspicious cars from Germany have declined since the sanctions on Belarus were updated.
“The general situation is that the number of cars is decreasing, but there is still some flow,” the official said. “There are still some cars that end up in Russia that were originally destined for Central Asian countries” such as Kyrgyzstan and Kazakhstan.
However, the Financial Times is still identifying vehicles that have been transported through Belarus since the tightening of sanctions.
A white Mercedes-Benz E220D with a license plate frame from German car dealership Gruma Automobile was photographed in Russia this fall, after crossing the EU's external border in September into Belarus. Gruma Automobile's head of sales, Michael Feuger, denied selling the car, saying: “We do not conduct any business with companies, organizations or people located in banned countries.”
Several German car sellers contacted by the Financial Times said they were not aware their cars were being sold to Russia or being advertised on Russian websites.
Markus Klapper, of Autohaus Reisert, said he had not seen Russian ads for his vehicles, but was aware of the tactic by which brokers copy details and photos from dealers' websites so they can resell cars at a higher price.
He noted that Russian smugglers may use a similar strategy. The Financial Times identified several cars with Autohaus Reisert license plates advertised on the Auto.ru website.
EU officials are aware that luxury cars still end up in Russia, but their primary focus is now on tackling sanctions evasion related to more dangerous goods that could be used by the military.
An EU official working on enforcing the sanctions said the fact that luxury cars still ended up in Russia was “undoubtedly a bit of a mystery,” but not a major concern “as long as Russia pays more for these cars.”
The official also admitted that the EU sanctions on Belarus were not as stringent as those on Russia, meaning some cars could still be exported to Belarus.
“Belarus’ sanctions have already had an impact — but they will always have a way out,” said a law enforcement official working to enforce the sanctions.
