Lithuania's LTG suspends re-exports of luxury cars to third countries from December

  • 2023-11-07
  • BNS/TBT Staff

VILNIUS – LTG Cargo, the freight arm of Lietuvos Gelezinkeliai (Lithuanian Railways, LTG), Lithuania's state-owned railway company, will suspend re-exports of luxury cars via Lithuania to third countries from December 1, and they will be subject to enhanced checks in November.

The move comes after an internal investigation revealed that luxury cars shipped to third countries, including Belarus, Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan, Georgia and Turkmenistan, may be traveling to Russia in violation of the existing EU sanctions.

"The applications for November shipments were submitted and approved last month. Customers who submitted their applications in November and whose shipments will meet the requirements of the enhanced controls and who can prove beyond doubt that they comply with the sanctions will be allowed to transport these goods, provided that the shipments are completed by December 1," the company told BNS.

Earlier in the day, LTG said it would reject all applications for the shipment to third countries of cars valued at more than 50,000 euros and produced in the last five years.

LTG Group's Corporate Affairs Director Aleksandras Zubriakovas said that the existing international sanctions on the re-exports of luxury cars via Lithuania to third countries may have been violated through the falsification of declarations.

"The essence of this scheme is the submission of a false declaration where the car seller, the company, provides false information about the final destination, which is not difficult to check by the car's VIN code," Zubriakovas told BNS on Tuesday. 

In his words, the re-exports of luxury cars to third countries, mainly Kazakhstan and Kyrgyzstan, increased in 2022 after the European Union imposed sanctions on Russia in response to its attack on Ukraine. This year, LTG's tighter cargo checks have led to a slight drop in the flow of such cargo.

LTG Cargo on Tuesday turned to the Prosecutor General's Office, asking it to investigate a possible breach of the existing international sanctions. 

It is believed that luxury cars destined for third countries – Belarus, Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan, Georgia, and Turkmenistan – are in fact being transported to Russia.

An internal investigation by LTG Cargo into 447 Mercedes, Porsche Cayenne, Cadillac and other luxury cars transported by nine customers revealed that 75 of them were registered in Russia, 55 entered Russia through other countries and no data was found on the place of registration of the remaining cars.

Four companies were found to be involved in a possible sanctions circumvention scheme.

Zubriakovas said he could not disclose the names of these companies.

"As this is potential pre-trial investigation material, and today, as you know, we have turned to the Prosecutor General's Office, we cannot disclose the names of the companies," he told BNS.

A total of 214 wagons with around 2,140 cars went through Lithuania in January, which is 10 times more than in the same period of 2022 (21 wagons, up to 210 cars), and the value of these cars ranged between 70,000 and 200,000 euros.

This comparison is important to illustrate the situation before the war in Ukraine and the start of the sanctions.

At that time, 1,039 wagons with around 10,400 cars passed through Lithuania in January-August, 4 times more than in the same period last year (225 wagons with around 2,250 cars).