A Russian warlord's new Cybertruck shows how Western sanctions are full of holes

Chechen leader Ramzan Kadyrov posted a video of a Cybertruck with a machine gun attached. Cars from the U.S. can be transported by sea to Europe before arriving in Russia. The Cybertruck may have been re-sold to Kadyrov by the original owner via an EU country.

Tesla doesn't ship Cybertrucks to Russia, but that doesn't seem to have stopped Chechen leader Ramzan Kadyrov from getting his hands on one.

Kadyrov, a self-styled warlord and head of the Chechen Republic, posted a video on Telegram over the weekend, showing a Tesla Cybertruck being driven through an empty street with what appeared to be a machine gun mounted on it.

"The Cybertruck will soon be sent to the special military operation zone," he said, referring to Russia's ongoing invasion of Ukraine.

Kadyrov claimed the Cybertruck was a gift from Tesla founder Elon Musk, whom he referred to as the "strongest genius of our time."

Musk strongly denied this on X, posting: "Are you seriously so retarded that you think I donated a Cybertruck to a Russian general?"

However, the question remains: If the video is real, how did Kadyrov get his hands on the Cybertruck?

Several smaller countries in the EU have previously been used for parallel trade that could circumvent sanctions. Experts suggested this may have allowed Kadyrov to bring the Cybertruck inside the country.

"The Cybertruck would be banned in general under export control laws as Tesla is a U.S. company," said compliance expert Stephen Fallon, referring to sanctions placed against Russia due to the ongoing war in Ukraine.

"I suspect it's probably been re-sold to Kadyrov by the original owner (maybe several owners ago) via the UAE, Kazakhstan, or Turkey."

Customs law expert Ward Lietaert agreed, telling BI that the EU has been facing serious sanctions evasion in the last couple of months.

"There are no export restrictions in Kazakhstan, for example," said Lietaert. "The Kazakh customer would sell or give that good to the Russian customer, through some kind of a stop in Kazakhstan, and then it would end up in Russia."

Fallon, who has worked on compliance for multiple European government agencies, also said Musk's team must be stressed trying to put out this latest fire.

"Musk clearly didn't mean for this to happen, but I bet you a whole team of people in Tesla's general counsel and compliance team are genuinely having aneurysms about this now."

The EU's frequent headache
A 2023 AFP report about cars funneled through Armenia adds further weight to the hypothesis of sanctions evasion through the EU.

The report includes a description of how cars bought at online auctions in the United States end up in Russia.

According to AFP, cars are "transported by sea to the Georgian port of Poti, repaired, transported to Armenia for customs clearance, and then taken to Russia by land via Georgia."

Lietaert said that countries like Armenia, Kazakhstan, Georgia, and Turkey have been scrutinized for parallel trade and re-exports, which are not strictly illegal but are still a gray area.

The Armenian embassy told BI that they do not agree with this practice. "We would like to reaffirm the Armenian Government's clear stance: Armenia does not support the circumvention of sanctions."

To curb this problem, the EU ratified export legislation in 2023 which included a "no-Russia" clause.

The clause applies to EU exporters and contractually prohibits re-exportation of a limited number of goods to or for use in Russia when selling, supplying, transferring, or exporting to a non-EU country.

"The clause aside, EU sanctions ban the sale of vehicles worth more than 50,000 euros to Russia," foreign policy expert Delaney Simon told BI. "The Tesla Cybertruck costs more than that, so exporting it appears to be in contravention of European regulations."

"You can be sure that where there are sanctions, there is sanctions evasion," Simon told BI.

"The longer a sanctions regime is in place, the more pathways will emerge to circumvent it."

Tesla did not immediately respond to a request by BI for comment.