May 29, 2024
Economy

Parallel economy: How Russia is defying the West’s boycott | Russia-Ukraine war


Customs records show how new players emerged to supply customer-facing businesses after official distribution channels shut down.

Before the war, Russian subsidiaries of Apple, Samsung and Electrolux were almost exclusively responsible for importing their products.

But since February 2022, only about 1 percent of shipments have gone through these official channels, according to customs data.

Instead, the vast majority of Samsung, Apple and Electrolux products have been imported by dozens of little-known Russian companies and individual entrepreneurs.

Most of the shippers named in Russian import data are incorporated in jurisdictions that have not joined sanctions against Moscow, including the UAE, China and Hong Kong.

Al Jazeera approached several of the biggest suppliers of Apple products identified in custom records posing as a potential wholesale buyer from Russia.

Three companies responded to email inquiries, expressing interest in selling to Russia despite sanctions. Two of those later stopped their communications without providing details about their businesses.

“We are actually selling directly on Russian marketplaces ourselves,” a sales manager at BMG International, a company registered in Dubai, told Al Jazeera.

“But we are also interested in establishing new channels with new clients. We can supply Samsung, Apple, and many other brands”.

On its website, BMG International claims that it is an “authorised distributor for numerous well-known brands, including Apple, Samsung, Xiaomi, Nokia, Realme, Oppo, Honor, JBL, gaming consoles, and many more”.

According to a price list for Apple products provided to Al Jazeera, BMG International sells smartphones produced for use in India, China, Japan, and the Middle East.

“But most of the devices, if not all, are made in India”, the sales manager said.

He said his company gets smartphones produced “for Arabic countries” directly from Apple and devices produced for other countries from affiliated companies.

He said that receiving payments directly from Russia might be problematic because banks in Dubai “are now asking too many questions and can reject the payment”.

To get around this, he said, he uses intermediaries to accept payments on his behalf – to avoid problems with his bank.

“We can introduce you to our partners in Moscow, you can send the payment to them in a Russian bank and they send money to us here,” he said.

“They will take a commission, of course.”

When directly approached by Al Jazeera, BMG refused to provide a comment.

Apple products are by no means an exception.

In Russian supermarkets, popular food brands such as Coca-Cola, Lipton, Lindt, Geisha, Tchibo and Pringles are still displayed on shelves despite officially exiting the country.

Russian shoppers can still clean their toilets with Bref and wash their clothes with Persil detergent.

L’Occitane cosmetics are being sold under a new Cyrillic name at the French brand’s former stores in Russia, which were sold to a local buyer after the invasion.

Other popular beauty brands such as Syoss, Schwarzkopf and Chanel – all of which officially pulled out of Russia – are sold openly in major cosmetics chain stores.



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