Luxury Brands Defy Sanctions: Gray Market Scheme Exposed in Belarus

Luxury Goods Sanctions Circumvented: Belarusian Scheme Uncovered Radio Svaboda has revealed a scheme allowing luxury goods from brands like Dior and Gucci, which officially left Russia, to still reach Belarus and Russia. The Belarusian Investigative Center's findings expose the use of Belarusian company Belkargo for delivery, undercutting sanctions and saving on taxes. The investigation highlights Eksparttorg's role, its connection to a former aide of Viktor Lukashenko adding a political dimension. A journalist involved in the investigation stated, "We ordered goods for €6450, and documents showed a Balenciaga jacket listed at only $4, and a Dolce & Gabbana vest at $6.50." This demonstrates the significant underpricing used to avoid detection. Goods are routed through Vilnius to Moscow, taking advantage of loopholes. The scheme not only bypasses sanctions but also avoids import duties and taxes. This raises questions about the effectiveness of international sanctions and the complicity of Belarusian businesses in circumventing them. The EU's June 2024 expansion of sanctions to Belarus underscores the ongoing challenge. The investigation serves as a cautionary tale about the resilience of illicit trade networks and the need for stronger enforcement measures.