(Repeats story first filed on Sunday)
* Exporters look to ship to Russia via countries not hit by
* Logistics firms weigh expanding routes to Russian
* Exemption for personal use may aid access for small
By Martinne Geller, Neil Maidment and Polina Devitt
LONDON/MOSCOW, Aug 17 People from Britain who go
to Cyprus in August are usually after sun, sea and sand but one
Lincolnshire man, a trader in fruit and vegetables, is heading
there this week for the potatoes.
Since Russia barred imports of food from most of the rest of
Europe, businesses are jostling for new buyers and sellers.
In the case of Knightsbridge Foods, its Russian supermarket
clients may get spuds this winter not from Lincolnshire but from
the Mediterranean island, where the crop from breakaway
Turkish-speaking Northern Cyprus can be shipped via Turkey and
so, the trader believes, evade Moscow's ban on European Union
"You need quick thinking," said Knightsbridge's owner, who
declined to be identified by name before he visits the divided
island, where the recognised government is an EU member. "You
need very strong contacts. Things change every single week."
Knightsbridge is one of many European firms exploring ways
to sidestep Russia's import embargo on fruit, vegetables, meat,
fish and dairy produce from the EU and Norway, as well as from
the United States, Australia and Canada.
The ban, in retaliation for economic sanctions over the
Ukraine crisis, could deny wealthy Russians delicacies like
Norwegian smoked salmon, Italian ham and French cheese.
But, as with the communist nomenklatura in Soviet times,
many expect the new elite will find ways to bypass customs
controls - not least as a waiver on shipments for personal use
leaves a grey area for importing small, high-value cargoes.
Some firms expect more traffic to countries which maintain
trading ties with Moscow, such as Turkey, and to neighbours like
Belarus and Kazakhstan, which form a customs union with Russia.
"Of course there's going to be a black market," said Luke
Devlin, director of PDQ Specialist Couriers in Britain, which
ships urgent products around Europe. "They will still want their
French ... cheese and they're still going to be able to get it."
In recent weeks there has been more interest in EU products
from ex-Soviet Belarus and other eastern states, Devlin said,
noting that logistics firms were considering ways to meet new
demand. "They've got established routes from the UK or France to
Russia ... and they may as well see where they can build up."
A London-based stock analyst covering logistics companies
said big, listed players which include Deutsche Post
and Kuehne & Nagel would probably think twice about
pouring too much new money into the region given the ban was
likely to be temporary and the uncertainty of demand.
The waiver for personal use seems likely to promote some
traffic between, say, St. Petersburg and nearby Finland, from
where shoppers can bring back small amounts of EU produce - and
notably wine, vodka and other alcoholic drinks are not banned.
There are limits, however. Customs officers told Itar-Tass
news agency they arrested a man driving home last week from
Finland with 70 kg (150 lb) of French pheasant, duck and wild
boar pate. Despite his claim that it was all for his own use, he
was charged and faces a fine of up to twice the goods' value.
Russian officials also say they will be alert to large-scale
importers trying to smuggle in embargoed goods via third
countries. Exporters from Belarus will have to specify the
country of origin of products when shipping goods onward to
Russia, the agriculture ministry in Minsk told Reuters.
Nonetheless, at least one Belarussian trader saw room to
manoeuvre: "At the level of small imports it's a very simple
scheme, to change the country of origin in the paperwork and to
change the label to a Belarussian one," he said.
"Of course an expert would spot it," he conceded. "So the
volume that gets through will depend on how much the Russian
government is interested in stopping it."
Belarus and Kazakhstan said they will continue to import the
foods Russia has banned but Minsk said it will stop them from
travelling onward to Russia. Since the ban was announced,
Russian media have joked that Muscovites will soon see supplies
of oysters and shrimps from landlocked Belarus.
Russia and Belarus have clashed in the past over alleged
abuses of their free trade agreement. For instance, Russia has
accused Belarus of illegally re-exporting westward large volumes
of refined products made from duty-free Russian oil.
"(Russian) regulatory bodies can track the origin of goods
when they are being sold," said a Russian official familiar with
the rules of the customs union with Belarus.
"And if goods that were not being supplied previously start
to come from Belarus, it will be a signal to tighten checks."
KAZAKH POULTRY, FAROESE FISH
President Vladimir Putin has already spoken to his Kazakh
and Belarussian counterparts, seeking cooperation against
Western foodstuffs simply being routed via their countries.
Russia's food standards watchdog said it had intercepted and
turned back a truck carrying 20 tonnes of U.S. poultry meat that
crossed the Kazakh border near Omsk in Siberia last week.
Some west European traders are looking at other possible
loopholes, including possible schemes based on Moscow's formal
application of the ban specifically to the EU and Norway.
Not only does that leave out Switzerland and Iceland, as
well as Liechtenstein, but some note it might also exclude
territories like Denmark's Faroe Islands that are not in the EU.
However, the temptation for, say, Norway's salmon farmers to
route their big Russian trade through the Faroes may carry too
much risk to future dealings with Moscow to be worth the effort.
In any case it remains unclear whether Russia will in fact
view Faroese or other produce as exempt from the embargo.
Russian Deputy Prime Minister Arkady Dvorkovich cited the
Faroes and Greenland, another Danish territory, in reported
comments saying he was seeking clarification from the Moscow
customs authorities on how they will treat such imports.
Theoretical hair-splitting about the geographical scope of
the Russian ban should not apply, however, to the likes of
Switzerland, Turkey, Serbia and some of its small, ex-Yugoslav
neighbours that have not followed the EU in applying sanctions
on Moscow and so are exempt from Russian retaliation.
EU leaders, offering compensation to some businesses such as
fruit farmers that may be badly hit by the sudden closure of a
market of 140 million consumers, seem unlikely to deter traders
who circumvent the embargo by sending goods via third countries.
"This is absolutely legal. There is nothing amiss about it,"
former EU agriculture commissioner Franz Fischler told Austrian
radio. "Any company in, say, Switzerland or the Balkans, is free
to buy products from Austria and then to export them to Russia.
"The problem is significantly reduced this way."
(Additional reporting by Andrei Makhovsky in Minsk, Maria
Kiselyova and Dmitry Zhdannikov in Moscow, Balazs Koranyi in
Oslo, Sarah McFarlane in London, Michael Shields in Vienna and
Anthony Deutsch in Amsterdam; Writing by Martinne Geller;
Editing by Alastair Macdonald)