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Sanctions, war in Ukraine. Import of Western products to Russia. Comment “Welt”

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In Russia, bazaar trade “made of large plastic bags”, remembered from the 1990s, is experiencing a renaissance – describes “Welt”. After the attack on Ukraine and the imposition of severe economic sanctions, luxury products that were supposed to disappear from this market many months ago are still available there. For example, the latest Apple devices or the latest Mercedes models. This is possible thanks to the gray import market. “It’s an important propaganda tool to prevent unrest,” explains Putin’s war tactics Welt.

MTS, one of the largest Russian mobile operators, sells the latest iPhone models. Major Auto, a network of car dealerships with locations in Moscow and St. Petersburg, encourages the purchase of luxury, the most expensive Mercedes models from the 2023 model year.

Apple, Ikea, Adidas or H&M available in Russia in the gray market

Until recently, such a situation would not be surprising, because the range of goods available in Russian supermarkets, car dealerships and electronics stores did not differ from the Western one. “But while it lasts war in Ukraine many brands should no longer operate in Russia,” emphasizes “Welt”, recalling that shortly after the outbreak of war, Mercedes-Benz stopped the production of luxury vehicles in Russia, which had started in 2019, and stopped exporting to this country.

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Apple also stopped selling its goods to Russia almost a year ago, and brands such as Ikea, Adidas and H&M also left Russia due to the invasion of Ukraine. However, their products are still available in Russia, which is backed by “a wide-branched network of companies and individuals in several countries.” Thanks to this “grey zone of imports”, Russian consumers have the opportunity to buy – even against the will of producers – goods at prices up to 100 percent lower than in the previous year. higher than before the war according to official sources. “And despite everything, there is a demand” – notes “Welt”.

Duty-free import to Russia from Kazakhstan

Already at the end of March last year, the Russian government explicitly allowed such parallel imports. The regulations include e.g. goods used in the power industry, industry, agriculture and railways, but also cars, smartphones, electronics, clothing, cosmetics. According to the estimates of the Russian Ministry of Trade, the volume of parallel imports by the end of 2022 will amount to nearly EUR 20 billion. “Russia benefits from the fact that some of its neighbors have very close economic ties to Moscow, while not being subject to Western sanctions. Kazakhstana member of the Moscow-led Eurasian Economic Union, has become probably the most important center of such imports in recent months” – explains “Welt”. Thanks to favorable customs regulations, goods that have reached Kazakhstan (e.g. via Dubai or Iran), can be imported into Russia duty-free. According to official statistics, the volume of exports of vehicles to Russia from Kazakhstan has quadrupled compared to the previous year, reaching a value of USD 1.2 billion. According to data from the Russian agency Autostat, 18 percent. of all passenger cars imported to Russia came from Kazakhstan – a country with a small automotive industry. Smaller-scale imports of iPhones and other consumer electronics often take the form of parcels of goods shipped from Kazakhstan. Only in the first half of 2022, the export of smartphones from Kazakhstan to Russia increased 328 times compared to the previous year.

Goods from Europe and bazaar trade

In Russia, bazaar trade “from large plastic bags”, remembered from the 1990s, is currently experiencing a renaissance. Luxury goods from the West are imported in the luggage of people who can move freely between Russia and Europe or the USA, for example thanks to second citizenship. “Goods from Europe” are also often imported to the order of “elegant boutiques for solvent customers” – adds “Welt”. “These items do not necessarily have to come from Europe, they are often ordered in Dubai or Turkey, because there no one has to comply with EU sanctions that limit the export of luxury goods to Russia worth more than 300 euros per item. Those who respond to such offers, they usually pay in advance and have no guarantee that they will ever see the goods. Despite the risk, many Russians decide to make such purchases. “The brands they trust are worth it to them, and despite the sanctions, many have a lot of money. And the president Vladimir Putin can make the population feel that the war in Ukraine hardly affects their lives. It is an important propaganda tool to prevent unrest.

Read also: They paint the ship several times in one trip. This is how Russia circumvents the sanctions

Main photo source: Shutterstock



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