Russia will never stop its campaign to crack down on illegal imports of cars from Eurasian Economic Union (丨 А С) countries, and will introduce more targeted restrictions in the future based on market changes...

Citing the latest report of Russia's "Kommersant", Russian Deputy Prime Minister Denis Manturov recently made it clear that although the country has approved the implementation of acar recycling fee mechanism until 2030, the government's crackdown onthe gray plan for illegal import of carsfrom the Eurasian Economic Union (丨 А С) countries will never stop, and more targeted restrictions will be introduced in the future based on market changes.

Manturov bluntly said that there is currently an "unfair phenomenon": Russia has signed cooperation agreements with many industrial partners. These companies have invested a lot of money in Russia to promote the localization of automobile production, which has driven the development of the local auto parts industry. However, at the same time, a large number of foreign brand cars have entered the Russian market on preferential conditions through duty-free channelswithin the Eurasian Union, which has an impact on car companies investing in Russia in compliance.

It is understood that a considerable number of Russian models are currently produced jointly with foreign-funded companies and have been identified as Russian local products through technology transfer. In recent years, with the acceleration of the localization process, the proportion of locally produced vehicles in Russia in the domestic market has increased from the previous 53%-55%to more than 60%, becoming the core force supporting the recovery of the Russian automobile industry.

The core of the tough signal released by the Russian government this time points to the long-standing gray chain of car re-exports within the Eurasian Union. The Eurasian Economic Union is composed ofRussia, Armenia, Belarus, Kazakhstan and Kyrgyzstan. The member states have achieved free flow of goods, but there are differences in the tariffs and taxes levied by countries on automobiles in non-Union countries. This loophole has been exploited by many merchants. They first import foreign-brand cars to alliance member states with lower tariffs, and then transfer them to Russia for sale throughinternal duty-free channels, in order to avoid high taxes and fees, includingunderreporting the value of the vehicle and counterfeiting. Certificate of origin is the most common means of operation.

Manturov particularly emphasized that the new restrictions will not be introduced all at once, but will be "dynamically followed up"-as long as Eurasian Union partner countries begin to become transit channels for foreign brand cars to enter Russia, Russia will immediately launch corresponding regulatory measures to block them. This means that in the future, Russia's supervision of Eurasian Union car imports will be characterized byprecision and normalization, and the operating space for gray re-exports willcontinue to be compressed.

written in the end

For China's used car export practitioners, Russia's policy statement sends a very clear signal of stricter supervision and must be highly vigilant.

Previously, some practitioners tried to re-export China cars into the Russian market through Eurasian Union countries such as Kazakhstan and Belarus to circumvent some tariffs and regulatory requirements. This operating model will face a devastating blow in the future. This time, the Russian government has made it clear that it will "dynamically block" all re-export loopholes, and the supervision will only be strengthened and not weakened. Any gray operation with a chance may lead to vehicles being detained, fined or even included in the industry blacklist.

It is recommended that all China exporters in the Russian market completely abandon the gray entrepot idea, strictly abide by Russia's import regulations, and conduct business through compliant direct export channels. At the same time, pay close attention to the latest policy trends of Russian Customs and the Eurasian Economic Union, make supply chain adjustments in advance, and avoid unnecessary losses caused by sudden changes in policies. In the long run, the standardization and rectification of the Russian market will eliminate a large number of illegal competitors and create a fairer and more stable market environment for China companies that are truly operating in compliance.

Source: Guangdong Good Car

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