Luxury Cars and Sanctions: How Russia’s Elite Keep Driving in Style
In the wake of the Ukraine war and subsequent sanctions, a large Russian betting company offered a unique prize in January: a Rolls Royce Cullinan. This offer highlighted a paradox: while sanctions aimed to restrict luxury goods, including vehicles, from entering Russia, the country’s elite still seem to have access to them.
Following Moscow’s full-scale invasion of Ukraine in 2022, the United States, the European Union, the United Kingdom, and numerous other nations imposed bans on exporting cars valued over $50,000 to Russia. This price point was a deliberate attempt to target high-net-worth individuals with potential ties to the Russian state. The cost of a Rolls Royce Cullinan, which typically ranges close to $1 million in Russia. At the same time, many major foreign automakers, including those producing luxury models, shuttered their Russian factories and offices.
The exodus of automakers from the Russian market has dramatically reshaped the automotive landscape. Chinese brands, once minor players, now command approximately 70 percent of new car sales. However, despite these challenges, expensive Western-made luxury vehicles remain accessible to Russia’s wealthiest individuals.
According to Russian customs data, around 1,300 vehicles valued at $100,000 or more entered Russia between March 2022, when Western sanctions went into effect, and the present.
Navigating Sanctions and Supply Chains
Systema, RFE/RL’s Russian-language investigative unit, investigated these import channels, tracing supply chains. They discovered that several companies imported vehicles through jurisdictions like South Korea and Hong Kong, which have their own restrictions on exporting luxury goods to Russia. Kyrgyzstan, a Central Asian country, saw a massive increase in car imports from Europe during the war years.
These findings suggest that, in the face of sanctions, connections to the military and security services are advantageous within President Vladimir Putin’s Russia, even when it comes to the sanctioned luxury car business.
Legal Loopholes and Parallel Imports
In response to the sanctions, Putin signed a law in June legalizing ‘parallel imports’ – the import of goods without the right-holder’s permission. This measure opened new avenues for importing a variety of items, including luxury cars like Bentleys and Maseratis. While this law didn’t legalize trading in sanctioned goods outside Russia, individuals have faced consequences for their role in these schemes.
In 2024 alone, three individuals in Germany received prison sentences of four to six years for exporting hundreds of luxury cars to Russia. Similar arrests occurred in Lithuania, with two Belarusians and two Lithuanians detained on suspicion of illicit activities. These actions highlight the ongoing efforts to circumvent sanctions and the legal risks involved in the international luxury car trade.
Systema identified 179 Russian importers and 220 exporters from 26 countries that participated in schemes for importing prohibited vehicles between March 2022 and October 2024.
The Role of Front Companies and Key Individuals
Most Russian companies identified by Systema as major luxury vehicle importers were already established in the automotive sector. However, one company stood out for having imported the most luxury vehicles, despite not previously operating in the car market. This St. Petersburg-based company, Garant LLC, specialized in fiberoptic components.
Maria Kalenova is the founder and director of Garant, which officially employs only nine people. Prior to 2022, Garant’s revenue was modest, with its highest pre-war figure being 250 million rubles in 2020 (approximately $3.3 million at the time). The company’s website still markets “electronic equipment and components.” Until the parallel import law was enacted, Garant’s annual import expenses were only $880,000. Jiating Product Factory Limited, based in Hong Kong, run by Miao Dong, a Chinese national, acted as Garant’s sole supplier.
Before switching its focus to luxury car exports in early 2022, Jiating’s exports to Russia were primarily fiberoptic network components, with Garant being a major client. This shift involved sending 305 automobiles worth $31.2 million, with 139 of them being valued at over $100,000 each. The story of Garant and Kalenova reveals critical connections with those in power.
Kalenova’s ex-husband, Aleksandr Stebakov, was involved in an act of violence in St. Petersburg in 2003, along with two other former cadets from the Military Institute of Physical Culture (VIFK). One of them, Vladimir Niyazov, is now the chief inspector of the Department of Physical Training and Sports of the Armed Forces of Russia. Another, Sergei Lushnikov, joined the Federal Protective Service (FSO), which is responsible for the security of top Soviet officials and vital state assets. Lushnikov was even assigned to protect Vladimir Putin at a 2017 event.
Lushnikov’s employment with the FSO is relevant to Kalenova’s business activities because the FSO has a reputation for indirectly protecting profitable businesses. A photo posted on social media shows Lushnikov with Maria Kalenova.
Financial data shows that Garant served as an intermediary for Russia’s biggest auto dealers, Rolf and Major-Auto, who were the customers for all the cars imported from Hong Kong.
The Automakers’ Response
Major Western automakers suffered significant losses after the full-scale invasion of Ukraine caused them to withdraw from the Russian market. Many of these companies now maintain that Russia is virtually non-existent from their perspective.
Mercedes-Benz topped the list of luxury vehicles imported into Russia after sanctions were imposed. In response to inquiries, Mercedes-Benz stated that it was reviewing the investigation’s findings and would contact relevant authorities if it found evidence of suspicious activity. “As a rule, we prohibit the sale of our products to unauthorized intermediaries even outside the contractual territory,” a spokesperson said.
Jaguar Land Rover (JLR), Porsche, Audi, and BMW offered similar responses. While Hong Kong was the central “transit hub” for Garant’s car imports, other areas have become significant since the invasion.
South Korea is another significant car manufacturing country with its own sanctions in place to prohibit exports of luxury vehicles to Russia.
Kyrgyzstan has also seen a huge increase in car imports from Europe and other Asian countries. Its pro-Russian government claims it is doing all they can to prevent the flow of sanctioned goods to Russia. A recent media investigation shows that figures close to Kyrgyz President Sadyr Japarov may be helping to re-export luxury cars to Russia.
Alexandre Prezanti, a British lawyer, noted that “no Russia” clauses legally obligate importers in third countries not to re-export to Russia. However, Ilya Shumanov, the former director of Transparency International’s Russian branch, stated that the EU’s rules regarding this issue are stronger and are backed by a ruling of the European Council.
Despite attempts to stop the flow of luxury goods, the steady stream of expensive cars into Russia suggests that the law of supply and demand remains firmly in control.
