Parallel imports may help bypass sanctions. This risk has to be addressed
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In March 2022, Russia allowed so-called parallel imports to the country, meaning that anyone can import a product from another country and sell it in Russia for profit without the intellectual property owner’s permission. In May-July, parallel imports have already reached $ 6 billion. According to the forecast by the Russian ministry of industry and trade, they will amount to $16 billion by the end of 2022, which is around 4.2% of overall imports in 2021.

Goods are imported directly to Russia and through countries “friendly” to the Russian Federation or countries of the Eurasian Economic Union – Armenia, Kyrgyzstan, Kazakhstan, Turkey, UAE, etc.

The list of goods allowed for parallel import includes ferrous metals, inorganic compounds, medical and other equipment, ships, spare parts for railways and auto components, consumer goods such as electronics and household appliances, clothing, footwear, and cosmetics. In particular, among the brands approved for parallel imports are Apple, Samsung, Hewlett Packard, ASUS, Cisco, Dell, Microsoft, Mercedes-Benz, General Motors, and others.

The parallel import creates problems for both producers and consumers of the goods imported in such a way. Some of these brand owning companies are still operating at some scale in Russia, and the appearance of their goods on the parallel import list has become another evidence that staying in Russia doesn’t provide any kind of protection for a company’s intellectual property. For consumers, the disadvantages of gray imports include the lack of warranty service, a limited set of products, and rising prices, the KSE Institute writes.

However, the parallel import does allow to bypass some sanctions and reduce the impact of companies exiting the Russian market, the KSE Institute argues. “Manufacturers of goods can’t stop the parallel import, and some companies are even interested in it,” the researchers claim.

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