The European Union added luxury goods to its growing list of sanctions against Russia on Tuesday, in a move the European Commission said would “directly hit Russian elites.”
While Russians only account for about 3% of global luxury spending, according to U.S. financial services company Jefferies Group LLC, the country’s super-rich are well known for their love of French and Italian luxury brands.
From caviar to premium cars, Russia’s affluent consumers will find many luxury items hard to come by under the EU’s new sanctions program, which prohibits the export of luxury products worth more than €300, the equivalent of $328, or €750 in the case of electrical appliances, and €50,000 for vehicles.
The EU list covers luxury food and drink, including truffles, champagne and caviar, which Russia imports in large quantities as well as producing domestically. Exports of high-end cosmetics, fashion and jewelry are all now prohibited, as well as more niche products such as “swords, cutlasses, bayonets, lances and similar arms”.
Premium auto brands such as Audi, BMW, Mercedes-Benz and Porsche are all now largely blocked from entering Russia given the limit on exporting expensive vehicles.
High-end sports equipment, musical instruments and appliances such as coffee machines are also off-limits.
Some Russian oligarchs have suffered the indignity of having their private yachts impounded in European ports this month, but replacing them won’t be easy, with “yachts and other vessels for pleasure” now sanctioned goods.
Europe’s big luxury groups have already closed their Russian stores as Western companies broadly exited the country following Russia’s invasion of Ukraine in February. Most were careful to avoid criticizing Moscow’s actions and said their stores were being closed temporarily due to operations challenges.
However, the EU’s sanctions rule out the possibility of luxury brands making a swift return to Russia, with Europe’s luxury export curbs likely to remain in force for months if not years, depending on how the Ukraine conflict unfolds.