The Russia bypass

Working with journalists from Kyrgyzstan, Lithuania, France and Germany, Novaya Gazeta Europe looked into the activities of one Moscow luxury car dealership run by a Russian businessman, and how it is connected to cronies of Kyrgyz President Sadyr Japarov.

The vast Berg Auto Premium car showroom on Moscow’s Baltic Highway is a new player on the Russian capital’s luxury car scene, opening its doors on 7 October 2023, which co-founder Mark Berg at the time proudly told glossy lifestyle magazine Svetsky Peterburg was Vladimir Putin’s birthday.

At the showroom a surprisingly wide selection of international vehicles is available despite the fact that the dealership opened after Western sanctions were imposed on exporting luxury cars to Russia. The company’s catalogue features over 100 luxury cars, among them the Porsche Cayenne Coupé, the new Tesla Cybertruck and the €1 million Rolls-Royce Cullinan. “We know no borders,” the showroom’s website boasts.

“When sanctions were imposed, I had one car delivered and sold it very quickly. Then there were more,” Berg, wearing a black turtleneck and an Audemars Piguet watch, told Svetsky Peterburg last year.

A former professional show jumper who once represented his native Lithuania in the sport internationally, Berg was born Benas Gutkauskas but legally changed his name in 2022. He also has a history of violence, for which he has been prosecuted three times in Lithuania, including once for an incident in which he attacked somebody with a hockey stick.

Though Berg has been living in Russia for years and has Russian citizenship, he has also retained his Lithuanian passport, according to investigative journalism NGO Siena. He turned down a request for an interview.

The Berg Auto Premium showroom he represents is an example of how, despite the war, people in the post-Soviet space can come together, even if, as in this case, the purpose is to bypass pesky rules for the sake of a tidy profit.

Western nations imposed tough sanctions on Russia 2022 in response to its invasion of Ukraine. The sanctions levied by individual Western governments all specifically banned the export of luxury goods to Russia as a means to punish the country’s elites for not opposing Vladimir Putin’s war.

But Berg is not the only one profiting from his sale of luxury vehicles despite the sanctions on Russia — certain members of the government elite in Kyrgyzstan are also making plenty of money from the scheme, which is how journalists first became aware of the situation.

Forbidden stories

In November 2024, Bolot Temirov, the founder of Kyrgyz publication Temirov Life, made contact with Forbidden Stories, an international network of journalists whose mission is to continue the investigations of reporters who have been silenced. For investigating corruption at the highest levels of power in Kyrgyzstan, Temirov found himself expelled from the country and stripped of his citizenship in 2022. Nevertheless, the publication that bore his name and most of its journalists continued their work in the country.

In January 2024, 11 Temirov Life staff members were simultaneously arrested in Kyrgyzstan, including Temirov’s wife, Makhabat Tadjibek Kyzy. In October, two of them, including Makhabat, were given custodial sentences, two more were handed suspended sentences, while the rest were acquitted for lack of evidence.

Temirov told Forbidden Stories that prior to his arrest, his colleagues had begun investigating links between various figures known to be close to the Kyrgyz authorities and Berg Auto Premium.

Having spent three years in prison for his prominent role in the country’s political opposition, Sadyr Japarov was elected president of Kyrgyzstan in a 2021 landslide. However, his pledge as he entered office to tackle corruption and cronyism made it all the more important to the staff at Temirov Life to investigate his own business interests and activities.

“We know many examples from history of opposition politicians coming to power and continuing the same old system of corruption and nepotism, and replacing past politicians with their relatives and friends,” Temirov says. In an investigation published in May, Temirov Life reported on how government contracts were routinely being awarded to companies with links to friends of Japarov’s sons.

While the journalists were being detained, the Kyrgyz police gained access to their phones and discovered that the outlet was investigating friends of Japarov’s nephew who they believed were involved in smuggling luxury cars into Russia.

Smuggling luxury

“The car and country of manufacture are European!” a Berg Auto Premium salesman insisted when speaking to an IStories journalist posing as a potential client. They were discussing a German Porsche 911 Turbo, the export of which to Russia is definitely banned under European sanctions.

However, as the salesman assured her, the dealership’s various workarounds were tried and tested. “The car will be flown from Europe to Bishkek, Kyrgyzstan. Then it will be transported by truck to Moscow.”

Customers can customise their new car on the official Porsche website just like anybody else. “The logistics are complicated due to sanctions, but anything is possible!” the salesperson said, adding that having “worked in official brand showrooms before”, he had connections around the world.

In October, Japarov assured the world that as a UN member his country did not trade in sanctioned goods. However, his words are clearly contradicted by customs statements, which show not only that Kyrgyzstan has become a hub for circumventing sanctions on Russia, but that people close to the president are profiting from their own involvement in the trade.

Though sanctions mean European manufacturers cannot export cars to Russia, exports to Bishkek are legal. According to Kyrgyz customs, between 2019 and 2021 the country imported cars worth a total of just €214 million. However, the figure for 2023 alone was €2.6 billion — an increase of 1,100%.

“This figure seems to suggest that almost every family in Kyrgyzstan changed their vehicles,” says economist Carl Grekou of the French economic institute CEPII, “So it’s more likely that the country has become a gateway to Russia.”

In 2023, parts for almost 900 BMWs, 820 Mercedes and 230 Porsches reached Russia via Kyrgyzstan, Forbidden Stories estimated. A Kyrgyz customs employee, who spoke to us anonymously, said that cars often receive a Kyrgyz customs stamp without even technically entering the country.

“Look at Moscow: Maybachs are being used as taxis. Those cars are registered here, but they never actually come here. We call it the ‘Wi-Fi system’ — everything happens remotely,” adding that purchasing official customs documentation for each car usually cost between €2,000 to €3,000.

A Russian car expert, who also asked to remain anonymous, told Novaya Gazeta Europe that Kyrgyzstan’s popularity with those seeking to circumvent sanctions was due to it being part of a customs union with Russia, meaning that they saved money on import duties.

“It is also more straightforward to go through Kyrgyz customs than Russian customs. The importer can lower the real value of the car and pay less import duty as a result, due both to corruption at Kyrgyz customs and the inferior technical equipment at Kyrgyz customs compared to Russian customs.”

The practice has recently caused problems for Russian car buyers, however, who suddenly began receiving demands from the Federal Customs Service to pay hundreds of thousands of rubles in additional duties. This occurs when Russians importing cars from Kyrgyzstan have quoted a fictitiously low price in order to pay lower import duties. Russian customs can check these deals for up to three years after they are made and if they suspect that the prices quoted are fraudulent, can demand what they consider to have been the real import duty due.

The Kyrgyz connection

Among those to follow to the Berg Auto Premium showroom’s Kyrgyz profile on Instagram, are Kyrgyz boxer Samat Abdyrakhmanov, who went to Moscow to test-drive a Mercedes when the showroom opened, as well as Ruslan Kydyrmyshev, an advisor to Japarov.

In a TikTok video posted in July 2023, a man named Syrgakbek Atyshov explains how the company he works for buys a Range Rover SUV in South Korea, imports it to Bishkek and sends it on to Moscow within three days. In other TikTok videos, he names his Moscow customer as Berg Auto Premium.

Numerous photos on Atyshov’s social media show him in the company of Japarov’s nephew, Eskat Nurkozhoev. Other people from Nurkozhoev’s inner circle also have links to Berg Auto Premium, such as Adilet Tidelbaev, who often appears in Atyshov’s photos.

Neither of them agreed to speak to Novaya Europe or its partners for this story.

Destination known

Attempts by the European authorities to prosecute car manufacturers whose products continue to end up on sale in Russia in breach of sanctions have been decidedly half-hearted. A criminal case was opened against one car dealer based in the German city of Bochum who allegedly sold €5 million worth of cars in Russia, as was another against a dealer in Aschaffenburg, also in Germany, who sold €10 million worth of cars to Russia, but neither case helped stop the flow.

“Everyone understands whom they’re selling to,” one Polish car dealer, who also works with Berg Auto Premium, told Novaya Gazeta Europe. “But on paper, no one is doing anything illegal: exporting cars to Kyrgyzstan isn’t banned. When it is, they’ll be transported through Türkiye instead.”

These middlemen have no moral qualms about their trade, he adds. “Most of our customers are in Russia. Our financial well-being depends on them and there’s no way of stopping it. Open a map and look at how many countries Russia borders”.