MarketHow is Russia circumventing Western sanctions?

How is Russia circumventing Western sanctions?


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The Russian Prime Minister is going to the meeting of the Eurasian Economic Union. It’s an important date, because neighboring countries should help lift Western sanctions.

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Mihail Mishustin’s travels generally do not attract much attention in the eyes of the world public. The Russian prime minister is constitutionally second only to President Putin, but probably only one-fifth in Russian reality.

Still, Mishustin’s trip to the Eurasian Economic Union meeting in Almaty, Kazakhstan, is more than a side note.

Parallel import of western brands

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Because the Russian economy is sick, even though the Kremlin is reluctant to admit it. According to a count by Yale University, 830 companies have withdrawn from Russia or no longer deliver there. So-called parallel imports will help buy Western products already by importing them through a third country.

Also, let the Russian population not have to miss out on the consumer goods they love. And who could be more suitable for this than the member states of the common economic union, where it is possible to be exempt from customs duty?

Shortly after the start of the war in Ukraine, the Russian Duma allowed parallel imports. The Moscow Ministry of Commerce lists hundreds of brands that are legal to import from another country. These include Mercedes, Volkswagen, Tesla, Miele, Philips, Apple and Samsung.

Mobile phones and cars from Kazakhstan and Armenia

According to the information given by Russia, 20 billion dollars worth of goods were imported last year, which corresponds to about 6 percent of total imports. Mobile phone and car exports skyrocketed in countries like Kazakhstan, Kyrgyzstan, and Armenia.

Such parallel imports may look different: Private individuals buy small quantities of iPhones or cars from dealers in Central Asia and sell them at a higher price in Russia. Or big sellers buy whole container loads. And sell to interested parties in Russia, for example, through online platforms.

Economist Michael Rochlitz still speaks of a “interim solution” for Russia. Importing goods through third countries is “much more expensive, much more complex, and you probably can’t import the same quantities.”

The biggest problem in the medium and long term is that Russia no longer has access to markets for high-tech goods. And you need it to keep the civic economy going.

University of Bremen economist Michael Rochlitz

Russia’s auto industry collapsed

The automotive industry is particularly affected. Last year, sales fell 58.8 percent to nearly 688,000 cars. This was reported by the Moscow-based Association of European Businesses, an association of international investors. In 2021, Russia was still the eighth largest car market in the world, with 1.7 million new cars sold.

    Source: ZDF

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    I am Ben Stock, a highly experienced professional with over 7 years of experience in the news industry. I specialize in market section writing and have published numerous high-quality articles on various topics under my name. My passion for journalism has helped me to develop an in-depth understanding of the industry, enabling me to stay up-to-date on all the latest trends and developments.


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