BMW Group has confirmed that it sold more than 100 high-end vehicles to Russian buyers, in apparent breach of existing EU sanctions meant to halt exports of luxury goods to Russia. The revelation comes after earlier media reports suggested the German automotive giant had been involved in such transactions.
Under EU and US sanctions introduced following Russia’s full-scale invasion of Ukraine, the export of luxury cars—especially models with engines larger than 1,900 cubic centimetres, along with hybrid and electric vehicles—has been prohibited since early 2022. BMW’s acknowledgement of these sales raises questions about how effectively sanctions against Russia are being enforced, especially given the multiple “back door” channels that remain open.
Sales described as “irregularities”
BMW characterised the sales as “irregularities,” confirming that staff from its Hanover branch orchestrated the illegal trade. The carmaker responded by dismissing all employees involved and pausing several upcoming deliveries, in an effort to bring the company back into full compliance with sanctions.
In an official statement reported by The Telegraph, a BMW spokesperson said: “In recent months, the products of various companies have been available for purchase in Russia even though the companies themselves have acted in accordance with all the applicable sanctions. The BMW Group has a range of measures in place to prevent such imports.”
Growing concerns over grey imports
The BMW affair also draws attention to broader challenges in implementing sanctions effectively. Despite direct sanctions from the EU and the US, so-called “grey market” or “back door” imports have been thriving.
Many goods continue to reach Russian buyers through intermediary nations such as Kazakhstan, Kyrgyzstan, Turkey, and the UAE, among others. These countries maintain longstanding trade ties with Moscow and have chosen not to impose their own sanctions. Their proximity to both Europe and Russia makes them ideal transit points for covert supply routes, complicating efforts by regulators to control the flow of sanctioned goods.
Shell companies and shadow fleets
Adding to the complexity, Russian businesses and individuals often set up shell companies in these third-party countries to mask the true origin and destination of products. The same approach is used in shipping, where “shadow fleets”—frequently composed of older oil tankers—are deployed to transport Russian oil illegally, circumventing international sanctions.
These covert operations make it difficult for regulatory bodies to accurately gauge the volume of products still making their way into—or out of—Russia. Although official direct exports from EU countries to Russia have dropped since 2022, grey-market trade remains significant, undermining the overall impact of sanctions.
With BMW’s recent disclosures, pressure is likely to mount for stricter enforcement and oversight of sanctions. EU officials have already been looking at strengthening regulations and seeking closer cooperation with third-party nations, but geopolitical sensitivities and established economic relationships continue to pose formidable barriers.
