A Moscow auto salon, Berg Auto Premium, has continued to thrive, despite European Union sanctions prohibiting the export of luxury goods worth over 50,000 euros to Russia. The showroom, which opened in 2023, displays a gold Mercedes G-Class, a black BMW X7 and a Porsche Cayenne with 460 horsepower, all of which are not supposed to be sold in Russia due to the sanctions.
The Russian elite, however, has found ways to circumvent these restrictions. According to Robin Brooks of the Brookings Institution, “every oligarch in Moscow gets their G-Class.” The cars are not delivered directly to Russia, but instead take detours through third countries like Belarus. As soon as a trade route becomes apparent, a new one is established.
Luxury cars, in particular, have found their way to Russia through sophisticated circumvention constructions. Kyrgyzstan has emerged as a particularly efficient hub for the import of European premium vehicles to Moscow. The central Asian country, which does not share a direct border with Russia, serves as a formal recipient of the vehicles, while the cars often never actually reach Kyrgyzstan’s soil. Vehicles are also increasingly being shipped to Russia from Austria, as reported by the Standard.
The “Wi-Fi principle” has been uncovered, where many of the cars shipped to Kyrgyzstan never actually arrive in the country. A customs official in Kyrgyzstan describes the process as the “Wi-Fi principle” where the relevant customs documents are stamped in Kyrgyzstan before the cars are transported directly to Russia.
Export data from Germany to Kyrgyzstan has seen a significant increase since 2021, with a value of 1.8 million euros in 2023. An Austrian company in Kufstein, which appears in Russian customs documents, has been found to have a firmyard filled with luxury vehicles, including a green Porsche, according to Google images. At least one shipment in 2023 was allegedly transported from Austria to Russia via Kyrgyzstan, according to the documents. The company denies any involvement and the reason for its appearance in the Russian customs data remains unclear.
The automotive industry has shown little public concern. The Austrian Association of Motor Vehicle Industry claims to be unaware of any cases from its own country and refers to media reports. The Austrian Ministry of Finance has declined to comment on individual cases.
Despite the sanctions, the offer of luxury vehicles in Moscow remains extensive. As long as profitable circumvention routes can be found, it is unlikely that this will change.