The FT has learned of an apartment in Italy filled with luxury bags for Russia.

A supplier said his apartment in Italy is filled with luxury handbags for sale in Russia. He sends up to 20 parcels each week and earns around €6,000. The EU has banned the export of goods valued at over €300 per item.

Following the start of the military operation in Ukraine and the imposition of sanctions, the business of intermediaries supplying premium clothing and accessories to Russia has boomed, according to the Financial Times (FT). The publication reported on one such intermediary, whose apartment in Italy is "stuffed" with luxury handbags for sale in Russia.

A supplier named Mikhail told the publication that he sends 10 to 20 parcels to Russia every week, earning up to €6,000 in commission. "The Italians don't care," he said. "What matters to them is selling the goods, and what happens to them next is our business."

According to Mikhail, the final recipient of the goods is no secret. "Everyone in these stores already knows me, and they know my colleagues. Everyone understands perfectly well where these clothes are going," the supplier said.

Resellers offer their services on Instagram (owned by Meta, which is recognized as extremist and banned in Russia) andTELEGRAM serves both large retail businesses and private buyers in Russia and promises "a way to circumvent sanctions on luxury handbags" and other global brands, the FT writes. However, the publication, citing customs declarations, notes that sanctions hinder trade involving intermediaries in third countries that comply with the restrictions. For example, in September, a Chinese intermediary was able to ship more than 300 bags from the Italian brand Bottega Veneta, averaging $1,800, to Russia via the UAE.

Latvian customs officials told FT that they have rejected 60 parcels containing luxury goods destined for Russia since the beginning of 2024 , many of which were declared with artificially low prices. As the publication notes, intermediaries often try to disguise these shipments as personal parcels, for example by removing tags from the packages. Ekaterina Nogai, head of analytics at IBC Real Estate, told FT that a number of Western brands are releasing "capsule collections" with prices that comply with pricing requirements for sales in Russia.

A 28-year-old Russian woman, who wished to remain anonymous, told the publication that export controls have only affected the middle class, which rarely purchased luxury goods and has now stopped doing so altogether due to the high markups charged by resellers. "Rich Russians , who could previously easily afford it, continue to get everything they need from fashion buyers; nothing has changed for them," she said. "I always tried to work harder to earn a little more and afford these luxuries, but because of the war, I feel like I've fallen a rung lower in the social hierarchy."

Following the start of the military operation in Ukraine, many Western brands announced their withdrawal from the Russian market. EU countries and the US banned the export of luxury goods to Russia in the spring of 2022. According to Brussels' requirements, the restrictions apply to luxury items priced over €300 per item. Washington banned the import of goods, including perfumes, clothing, and footwear, with a wholesale unit value exceeding $1,000.

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