Luxury Cars and Sanctioned Goods Are Still Flowing to Russia Via Loopholes, Sky News Finds

Luxury cars are reaching Russia despite Western sanctions, mainly through the Caucasus countries, according to Sky News.

After Russia's invasion of Ukraine in 2022, Western sanctions halted the flow of certain goods, including dual-use items and luxury products. However, exports of these goods later surged in Russia’s neighboring countries. Experts suspect the Caucasus is being used to smuggle goods into Russia, with the trail going cold once vehicles cross the border.

Sky News journalists observed cars being transported to Russia near the Verkhniy Lars checkpoint in Georgia. These vehicles come from European countries or other Caucasus states like Azerbaijan, often delivered by drivers unaware of the cars' origins. Loopholes in Georgian sanctions allow vehicles to be registered in Armenia or claimed as en route to Kyrgyzstan, enabling their transfer to Russia.

Once the cars reached the Russian border, they were parked for a few days to process paperwork, despite Georgia’s ban on exporting vehicles to Russia after European sanctions. Loopholes, however, allow vehicles to cross the border. One common method is to register the cars in Armenia before proceeding to the Russian "Lars" checkpoint, or claim they are en route to Kyrgyzstan. The cars are then issued transit plates, and since Georgians can travel to Russia visa-free, drivers simply deliver the cars and hitchhike back to Georgia.

The journalists noted that, as a result, European sanctions are ineffective — Russia's economy remains strong, there is no shortage of goods in Moscow, and Caucasus countries, especially Georgia and Azerbaijan, profit from helping to circumvent sanctions, Sky News reports.