BMW has admitted that more than 100 of its luxury cars were sold to Russian customers, in violation of international sanctions imposed after the Kremlin invaded Ukraine.
The German carmaker attributed the sale to a handful of rogue employees at its Hannover branch, who have since been fired.
BMW, along with other major German companies such as Volkswagen, Porsche and Mercedes, halted direct exports to Russia in early 2022. However, the incident highlights how Western goods reach the Russian market, often via so-called “back door” routes. Which circumvent sanctions.
Although trade volume between Germany and Russia has declined since the restrictions were imposed, there has been a significant rise in exports to former Soviet states such as Kyrgyzstan, Kazakhstan, Armenia and Georgia – countries that are not themselves subject to sanctions. The Institute of International Finance points to a 5,500 percent jump in German car exports to Kyrgyzstan and sharp increases in Kazakhstan, Armenia and Georgia, noting that reported figures often fail to match domestic import records, suggesting “fake destination” shipments.
A BMW spokesman said the group had now halted any outstanding deliveries following the “irregularities” revealed by its internal controls. “In recent months, products of several companies have become available for purchase in Russia even though the companies themselves have acted in compliance with all applicable sanctions. This is usually the result of ‘gray market’ imports.” The BMW Group has a range of measures in place to prevent such imports. .
The spokesperson added that while the company continues to comply with the ban, some employees have intentionally facilitated unauthorized sales. “Delivery of further ordered vehicles has now been halted, and the decision has been taken to dismiss the key personnel responsible,” he added.