70–80% of old automobiles supplied by South Korea to Kyrgyzstan and Kazakhstan are believed to be bypassed to Russia, The Korea Economic Daily reported. In 2023 alone, it is estimated that thousands, potentially even tens of thousands, of South Korean cars entered Russia from Kazakhstan and Kyrgyzstan.
The vehicles typically undergo customs clearance in Almaty and Bishkek, the main cities of Kazakhstan and Kyrgyzstan, respectively. They are then transported into Russia, primarily by truck and possibly by rail in some instances, with Moscow and Saint Petersburg being the main destinations.
The Customs Office reported that Kazakhstan received 13,347 used cars and Kyrgyzstan 5,905 from South Korea in the previous year. Kazakhstan’s import of South Korean used vehicles increased from 4,000 units in 2021 to over 10,000 last year. Similarly, Kyrgyzstan saw a surge in imports from 4,490 units in 2021 to over 50,000 last year. This spike is attributed to its comparatively lower customs tariffs than Kazakhstan.
With the introduction of international sanctions on Russia following its invasion of Ukraine in 2022, there is concern that newly produced automobiles from South Korea may have also been imported into Russia via these countries. Vehicle shipments to Kazakhstan and Kyrgyzstan increased sharply during the post-sanction era; last year, 29,297 and 500 cars, respectively, represented increases from 2022. Exports to these nations increased by nearly 65.6% and 700% compared to 2021.
While directly or indirectly exporting passenger cars to Russia is not inherently illegal, the South Korean government implemented export controls on vehicles exceeding $50,000 since April last year, thus allowing transactions involving lower-priced cars.
A foreign affairs specialist emphasized the intricacy of legally addressing the diversion of restricted commodities into Russia through third countries and pointed out that relevant authorities now have an additional task to monitor sanctioned items efficiently. In December last year, the Ministry of Trade, Industry, and Energy suggested that medium and large passenger automobiles with engine displacements exceeding 2,000 cc be added to the export restriction list to strengthen regulations.
It would result in export restrictions for well-known SUV models in Russia, including the Hyundai Tucson, Santa Fe, Kia Sorento, and Sportage.
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