Avoiding sanctions: European trucks reach Russia via Belarus
Belarusian car suppliers are in uproar. Some cars from Europe are no longer allowed into Belarus by Poland, Latvia and Lithuania. The purpose of the ban was to prevent the resale of luxury cars to Russia. We first talked about shady schemes at the end of last year.
This investigation will cover trucks, a new category of European cars that generate revenue for Belarusian intermediaries. We will also reveal a network of companies in Europe, Belarus, and Russia that transport passenger cars in violation of sanctions. But this time, let’s start with heavy vehicles.
WUTHERING FREIGHTS
Belarusian businessman and award-winning wrestler Ihar Dziatko is celebrating his success. His new company ended the year with impressive financial performance. Turnover was over $14 million and net income was $14 thousand. Dziatko has been involved in the car trade for about ten years, but his business only made a noticeable hit last year.
RECORD EXTRACTS FROM THE SPARK INFORMATION SYSTEM – OOO AUTOBY PROFILE PAGE AND FINANCIAL RESULTS REPORT (2023)
Dziatko’s Russian-based company, Autoby, imports Western brands of cars and trucks sanctioned by the European Union. The dealer actively promotes current stock on social media. New arrivals include Mercedes-Benz Actros L and Volvo FH 500 tractors. The cars came from Europe. Autoby is not the only player in this market.
The customs data we have shows that dozens of Belarusian companies are transporting sanctioned European trucks to Russia. Popular car brands include Volvo, Scania, Mercedes-Benz, DAF, MAN, and Renault. The trucks come from Sweden, Belgium, the Netherlands, France, Germany and Poland.
Following the full-scale invasion of Ukraine, the European Union prohibited the sale of trucks to Russia and Belarus. However, these vehicles are entering these countries by circumventing the sanctions.
Thanks to these intricate schemes, more than 600 tractors worth $60 million were delivered from Belarus to Russia in 2023. Belshintorgservis, Autoby Leasing and NMP Logistic became the leaders in this trade. Together, they captured almost 60% of the grey car market, significantly enhancing their financial position.
Individual entrepreneurs were not included in our rating due to the unavailability of Belarusian accounting statements for them. Nevertheless, some sole proprietors also made good money on sales of European tractors. For example, last year, Vaukavysk businessman Artsiom Piskunou sold Mercedes-Benz, DAF and IVECO trucks to Russia. Total supplies exceed $5.4 million. Piskunou declined to comment.
YOUNG BUT DARING
The Belarusian company NMP Logistic ranks third in our rating. It was established just a couple of months after the introduction of European sanctions. During the year, its sales increased tenfold to $7 million and net profit increased fivefold to $47 thousand.
Record extract from the online company verification system Legat.by – profit and loss statement for OOO NMP Logistic.
The director and sole owner of NMP Logistic is Hleb Charnyshou, a native of Kobryn.
Record extract from the Unified State Register of Legal Entities and Individual Entrepreneurs of Belarus – OOO NMP Logistic.
Last year, his company supplied Volvo, Mercedes-Benz, DAF and MAN trucks to Russia. Total supplies exceed $3 million.
Hleb Charnyshou. Source: cargonomica.com
The company Pro Avto is the only buyer of trucks in Russia. Last year the company reported record sales of $10 million and ended the year with a net profit of $300,000 for the first time in many years. Pro Avto is part of PP-Kholding, which is linked to the major oil company Tatneft.
Record extracts from the SPARK Information System – OOO Pro Avto profile page and financial results report (2023).
PP-Kholding is co-founded and directed by businessman Alexander Proskurin.
Record extract from the SPARK Information System – OOO PP-Holding ownership structure analysis.
"Since there are no sanctions between Russia and Belarus, it is impossible to circumvent them. You can go around what exists, and what doesn’t exist doesn’t exist", Proskurin replied when we asked.
He claimed not to have met the management of NMP Logistic. According to him, the Belarusian company has nothing to do with Pro Avto. But we found out that this is not the case.
During the registration of NMP Logistic, Hleb Charnyshou, the director and owner, provided a contact email address with the domain name pro.auto. This is the website of the Pro Avto company, where Charnyshou used to be listed as the head of the legal department. Customs data shows that NMP Logistic, a Belarusian company, supplied sanctioned equipment solely to PP-Kholding. Charnyshou is associated with both companies.
"We are no longer engaged in this [deliveries of European trucks to Russia], because there are certain restrictions on the part of the state. This is classified information. I refuse to comment", Hleb Charnyshou told Buro.
EXPORT AGENCY
Autoby Leasing is the second-largest supplier of European tractors to Russia. The company owns autoby.by, a website that aggregates car sales from private sellers and showrooms across Belarus. Last year, Autoby Leasing’s revenue increased by six times to $15 million, and net profit increased by almost 22 (!) times to $1 million.
Record extract from the online company verification system Legat.by – profit and loss statement for OOO Autoby Leasing.
Siarhei Lytko, a native of Crimea holding a Belarusian passport, is the owner of Autoby Leasing.
Record extract from the Unified State Register of Legal Entities and Individual Entrepreneurs of Belarus – OOO Autoby Leasing.
Back in 2012, he founded the Exact Deliveries trading company in Smolensk. Over time, it has grown to a holding company with branches in Russia, Belarus, Kazakhstan, Kyrgyzstan and Uzbekistan. The group of companies specializes in export and import transactions.
Record extracts from the SPARK Information System – OOO Exact Deliveries profile page and ownership history.
Siarhei Lytko. Source: nds.kg
"We are not brokers, logisticians, or a transport company. We are an export agency that will help [...] sell your goods anywhere in the world", the holding’s website says.
Last year, Autoby Leasing delivered Volvo, DAF, MAN, Scania and Renault tractors to Russia. Total supplies exceed $5.8 million.
"I am not directly involved in this activity [the supply of European trucks to Russia], so I have no comment at the moment", Siarhei Lytko told Buro.
The only buyer of trucks from Autoby Leasing is a Belarusian businessman and former athlete Ihar Dziatko and his company Autoby. We mentioned them above. Autoby is an importer of Western car and truck brands that have been subject to EU sanctions. Dziatko acted as the director of the Belarusian company Autoby Leasing from April 2022 to July 2023. In other words, as in the case of NMP Logistic, related companies were used to sell equipment from Belarus to Russia.
Ihar Dziatko hung up the phone as soon as he heard our questions about the supply of European cars to the Russian market.
CHANGING TYRES
The largest supplier of European trucks to Russia is the Belarusian company Belshintorgservis. For almost 30 years it has been selling tyres, discs, batteries, car parts, cars and special-purpose vehicles. Its customer base includes more than 10 thousand companies. Following the 2020 protests in Belarus, Belshintorgservis supplied tyres to the Investigative Committee, the State Committee for Forensic Investigations, the police, the military academy, military units and enterprises under the Lukashenka Facility and Property Management Office.
Last year, the company’s revenue increased fivefold and reached almost $46 million. The net profit increased 24 (!) times to $390 thousand.
Record extract from the online company verification system Legat.by – profit and loss statement for NPOOO Belshintorgservis.
Belshintorgservis is a distributor of Volvo, Scania, Mercedes-Benz, DAF, MAN and Renault tractors to Russia. Last year, the value of its shipments exceeded $26 million. Among the buyers are Russian companies that sell cars.
Belarusian businessman Uladzimir Serzhanovich is the beneficiary of Belshintorgservis.
Record extracts from the Unified State Register of Legal Entities and Individual Entrepreneurs of Belarus – NPOOO Belshintorgservis and SOOO Romstone-M; record extract from the Lithuanian Register of Legal Entities – UAB Spiget Investment Group.
He told Buro that he supported the sanctions imposed over Russia’s invasion of Ukraine. According to him, it is necessary to fight companies that supply dual-use goods to Russia that can be used in war. At the same time, the businessman believes that there is nothing wrong with the supply of consumer goods.
"I have 200 employees, I have loans and things like that. Tell me how I should pay salaries and feed these people. Should I just close down and not trade anything at all?! What should I do, die?!" exclaimed Serzhanovich.
Uladzimir Serzhanovich. Source: probusiness.io
He confirmed that Belshintorgservis sells European trucks to Russia, but does not consider such deliveries to be a way of circumventing sanctions.
"We are not working with the European Union. We work within the Eurasian Economic Union. These cars move freely there, there are no restrictions. And how they got there [into the EAEU], I haven’t the slightest", Serzhanovich said.
We checked the VIN codes of trucks that Belshintorgservis delivered from Belarus to Russia. It turned out that some tractors had passed through Lithuania. From there, they allegedly went to Kazakhstan but eventually ended up in Russia. A classic scheme for circumventing sanctions.
AN HONEST CONFESSION
In addition to trucks, all the top three companies had sales of passenger cars to Russia. Earlier, we had a look at who was behind such deliveries. Now we have been able to find out the details of how a business of this kind is organised. The supply chain involves companies from four countries – Germany, Lithuania, Belarus and Russia.
We found confirmation of this in the documents of a Russian court. One of the entities we investigated went there to complain about how customs authorities acted. The company in question is Autoby, owned by Belarusian Ihar Dziatko. Last year, Autoby purchased Volkswagen, Mercedes-Benz, BMW, Audi, Lamborghini, Porsche, Ferrari and other passenger cars from the Belarusian company Autoby Leasing. Total supplies exceed $3.5 million.
One of these shipments came to the attention of Customs, which decided to investigate. Autoby bought a Toyota car from Autoby Leasing. The car was manufactured in the Japanese company’s European plant. Customs officials thought the price of 5 million Russian roubles (almost 65,000 euros) was underestimated and corrected it. The Autoby company challenged the decision of the customs and won the case.
The Moscow Arbitration Court ruling in favor of OOO Autoby.
Court documents revealed how the car ended up in Belarus. Autoby Leasing bought it from the Lithuanian company Skani Siunta. The Lithuanian company, in turn, brought the car from Germany. Skani Siunta bought it from the German company AZN Auto Zentrum Nord GmbH & Co. KG. This is a dealership in the city of Chemnitz that actively sells cars.
Autoby explained to the court why the car’s arrival in Russia involved such a long chain of companies.
"Due to the imposition of sanctions by EU states against the Russian Federation and its residents [...] for the import of vehicles to Russia, OOO Autoby cooperates with intermediary companies in Belarus and the EU", the case files say.
In other words, the company admitted to using intermediaries in Lithuania and Belarus to evade sanctions.
On the way from Germany to Russia the price of Toyota increased by 3600 euros. Autoby Leasing charged 63 euros for intermediary services. The German company AZN Auto Zentrum Nord GmbH & Co. KG has stated that it does not sell cars to Russia. The director of Skani Siunta did not respond to our request.
COMMOTION AT THE BORDER
Following the publication of our investigation into luxury cars, European customs officials have tightened border controls. An additional set of documents may be required from the shipper and the consignee. For example, the manufacturer’s declaration or route logic justification. This means that the parties to the transaction have to confirm that the sub-sanctioned vehicle will not remain in Russia.
"This is the introduction of a mechanism for monitoring the effective implementation of restrictions in force", Pavel Latushka, a representative of the United Transitional Cabinet responsible for sanctions pressure, informed Buro.
At the end of March, Lithuanian customs authorities intercepted a BMW X1 car driven by a Belarusian citizen. The check revealed that he was transporting an EU-registered car to third countries for commercial purposes. The violator faces a fine and confiscation of the car.
The BMW car seized at the border. Source: lrmuitine.lt
"The Customs Service may carry out any customs control that it deems necessary. It may include, in particular, inspection of goods, sampling, verification of the accuracy and completeness of the information specified in the declaration, verification of authenticity of documents, inspection of vehicles, official requests and other similar actions", the Lithuanian customs informed Siena.
As European cars are not banned from entering Belarus, ordinary citizens should not suffer from stricter border controls. The inspections are primarily aimed at intermediaries who resell European vehicles to Russia.
Earlier this year, the customs authorities of Lithuania, Latvia and Estonia agreed to tighten cargo controls at the border with Belarus and Russia to prevent the supply of goods bypassing sanctions. Experts believe that harmonising the restrictions imposed on Belarus and Russia is effective.
"Any sanctions against Russia should also be applied to the Lukashenka regime, because any difference in restrictions creates loopholes for Lukashenka, who is a skilled smuggler at the state level", believes Latushka.
According to calculations by the Norwegian consulting organisation Corisk, there are more than 3,000 goods that cannot be exported to Russia but can be sold unrestricted to Belarus. Among such goods are SUVs that can be used in the war against Ukraine.
"For export controls to be effective, sanctions against Belarus should mirror those imposed on Russia. Today, the Belarusian gap is big enough for an armada of trucks, cars and other goods to pass from the West to Russia and possibly onto the battlefields of Ukraine," said Aage Borchgrevink, senior adviser to the Norwegian Helsinki Committee.
Belarus is therefore a gateway for European goods to Russia. Corisk says our country accounts for about a third of shadow exports to Russia, worth over 10 billion euros in 2022-2023.
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