Georgia Halts European Car Re-exports to Russia Due to EU Sanctions

Starting from today, Georgia has imposed a ban on the re-export of passenger cars from the European Union to Russia. This action aligns with the sanctions package passed by the European Union in June, as reported by the News-Georgia agency.

This prohibition applies to both new and used cars with engine capacities exceeding 1900 cubic centimeters, including electric and hybrid vehicles. Car re-exports have played a significant role in Georgia's external trade.

During the first half of the current year, cars occupied the top position in both exports and imports. They constituted one-third of the total export volume (32.9%), valued at $1.18 billion, and nearly one-fifth of imports (19%), amounting to $1.62 billion.

In the first six months of 2023, Georgia sold cars to Russia for a total of $53 million. Export has surged by 274% over the year, with the average price of cars supplied from Georgia to Russia standing at $14,000.

Starting from August 1st, Georgia has also banned the supply of American-made cars to Russia.

Georgia's Minister of Economy, Levan Davitashvili, expressed hope that car re-exports to Russia would not cease. He stated that the trade in passenger cars is a crucial source of income for Georgia.

The Georgian authorities assert that they fully comply with international sanctions but will refrain from imposing bilateral sanctions on Russia, as it is not in the country's best interest.

It's worth noting that in early September, the ruling pro-Russian party, "Georgian Dream," initiated the impeachment procedure against President Salome Zurabishvili. The official reason cited was her visits to Europe, which were not coordinated with the government.

As previously reported by The Gaze, the de facto leader of the "Georgian Dream" party is Bidzina Ivanishvili, a figure on the "friends of Putin" list, who held the position of Prime Minister of Georgia from October 2012 to November 2013. According to Transparency International Georgia, Ivanishvili is the beneficial owner of at least one company in Russia, and his close associates continue to do business with a former KGB general under US sanctions. In 2022-2023, Georgia became one of the few trading hubs through which Russia circumvents sanctions on the import of electronics and dual-use goods.