The automotive grey market and Russia sanctions.
Limited editions, premium SUVs, supercars: cars that dealers cannot officially obtain, and that still reach the showroom through third parties and purchasing companies. That trade is lawful. Since the EU Russia sanctions, however, German authorities see it differently. When a car turns up in Russia, they look for the person at the start of the chain. If that is you, I defend you.
Talk in confidence · +49 69 24746870Do these sound familiar?
- The Russia allegation: you are accused of selling cars to Russia because they appeared there, although you sold within the EU or to a third country.
- The database: investigators rely on a Russian registration database as alleged proof.
- The supplier: your own supplier washes his hands and points at you.
- The GPS: you are said to have disabled tracking so the car could go to Russia.
The hindsight trap.
A structure that served a lawful purpose often looks, in hindsight, as if it served an unlawful one. A purchasing company set up to get around manufacturer terms suddenly looks as if it was built to prepare an export to Russia. Manufacturers hand over buyer data, customs investigators search premises and freeze accounts.
Yet criminal liability does not depend on how a business model looks today. It depends on whether the seller, at the time of the sale, knew and intended that the car would be exported in breach of the sanctions. Separating intent from hindsight is the core of every defence in these cases. The EU bans also cover indirect deliveries, so a sale to Kazakhstan, Kyrgyzstan, Armenia, Georgia or the UAE is not a safe harbour if the seller knew where the car was going, but neither is it a crime as such.
From the search to the trial.
- Immediately during a search: the right conduct during searches, seizures and account freezes, available at short notice.
- File access and reconstruction: understanding what the authorities have and reconstructing each transaction from your perspective.
- Intent, not hindsight: establishing what was actually known and intended at the time, the decisive lever under section 18 AWG.
- Tax law in view: VAT, margin scheme and confiscation often run in parallel. We defend both levels.
- Foreign buyers and suppliers: we advise foreign dealers caught up in German proceedings, including witness questioning and European Arrest Warrants.
I have worked in the automotive sector for many years: as external compliance adviser to manufacturers, for the VW and Audi dealer association in the diesel scandal, and now for independent car dealers. I know the perspective of manufacturers, suppliers and the independent trade, and how these investigations are run. We work in German, English and, through our China Desk, Chinese.
German version: Automobilhandel und Sanktionen · See also: EU sanctions and the Russia embargo · European Arrest Warrant
Grey market and sanctions in brief.
Is selling a car to a buyer in Kazakhstan, Armenia or the UAE a sanctions breach?
Not as such. Selling to a buyer outside the EU is generally lawful. The EU Russia sanctions, however, also prohibit indirect deliveries to Russia. A dealer who knows, or accepts, that the car will be passed on to Russia commits an offence under section 18 of the German Foreign Trade and Payments Act (AWG). What the dealer knew at the time of the sale is therefore the decisive question.
The car turned up in Russia. Am I automatically liable?
No. Criminal liability requires intent at the time of the sale. A car that later appears in Russia, or in a Russian database, is an indication investigators rely on, but it does not prove that the seller knew or intended the onward delivery. Separating hindsight from intent is the core of the defence.
What penalties apply?
Intentional breaches carry three months to five years' imprisonment. If false statements about end use or route are made to the authorities, or a controlled company in a third country is used, the case is regularly treated as particularly serious, with six months to ten years. In addition, the entire sale proceeds can be confiscated, often secured early by freezing bank accounts.
I am a foreign dealer who buys cars in Germany. Does this concern me?
Yes. German investigators look at the whole chain, including foreign buyers. Foreign dealers can be named in German proceedings, become subject to a European Arrest Warrant or be questioned as witnesses. Early advice helps to avoid statements that later harm you or your German supplier.
This page provides general information and does not replace advice on an individual case.
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Customs investigators have searched your premises, or a car you sold has turned up in Russia? Call the partner directly. Waiting is the worst strategy.
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