"The 'Dagestan' Scheme for Selling Cars from Kyrgyzstan Gains Momentum in Russia"

Юлия Воробьева Economy
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The 'Dagestani' scheme for selling cars from Kyrgyzstan is gaining traction in Russia
In recent days, the so-called "Dagestani" scheme for selling cars originating from Kyrgyzstan has become increasingly popular in Russia. This is reported by Autonews.ru.
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According to the publication, many offers with surprisingly low prices have appeared on popular car sales platforms. Russian citizens purchasing such cars can save from several hundred thousand to over a million rubles.

Lawyers have shared their opinions on the consequences of such transactions.

The "Dagestani" scheme is most commonly found in the Southern Federal District and the republics of the North Caucasus, such as Chechnya, Ingushetia, and Dagestan. Local residents post advertisements offering cars for sale at very attractive prices. At first glance, these are new cars without damage, with good equipment and appealing designs. However, the reality may not be so straightforward.

Cars offered at such low prices are registered to citizens of Kyrgyzstan, which is an open secret for sellers. The sale is conducted on behalf of relatives of the owners through a general power of attorney, which grants the right to re-register the vehicle.

Sellers explain the low cost of the cars by the low duties in Kyrgyzstan. The new owner of a car registered in Kyrgyzstan can use it in Russia for a year, after which they will need to leave the country and re-enter, not forgetting to re-register the power of attorney for managing the vehicle.

Lawyer Lev Voropaev explained the risks buyers may face. According to him, such transactions cannot be considered a full-fledged purchase of a car.

"In fact, this is not about changing ownership but merely about the right to manage the car based on a power of attorney. That is, ownership does not transfer to the new owner. An ordinary consumer might think they are buying a car at a significantly lower price than in Russia and believe they are saving large sums," the lawyer explained.

This viewpoint was supported by Anatoly Semenov, director of the Association of Parallel Imports, who noted that such transactions are not a true purchase "by power of attorney," and in fact, the car does not become the property of the buyer.

Experts believe that Russians are unlikely to be able to use such cars purchased under power of attorney at undervalued prices in the future.

Lev Voropaev warned that the experience of owning cars imported from Armenia, Abkhazia, and Kazakhstan shows that such schemes are temporary. Cars customs-cleared at low rates in Kyrgyzstan should not leave the country's borders.

"We do not know what customs duties were paid for these cars in Kyrgyzstan. If they were paid not at the EAEU rates but at domestic rates, then these cars are considered conditionally released within the EAEU and cannot be goods of the union. If mass imports begin, the state may impose certain restrictions, and these cars could be seized, as happened with vehicles with Armenian and Abkhazian plates. Drivers may also be held liable for operating such vehicles," the lawyer added.
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