This spring, The Insider drew attention to the fact that the Leica Camera company, after announcing its withdrawal from the Russian market, was re-registered under a new name - instead of Leica Camera Russia, the company became known as Vechernyaya Zvezda LLC. At the same time, the owners and director of the company remained the same. A 99% share worth RUB 33,589,982.25 belongs to Leica Camera Austria GmbH, a 1% share worth RUB 339,292.75 belongs to AHK Vermögensverwaltung GmbH. The director of the company, an Austrian citizen Klaus Hauer, also remained the same. As of June 5, 2023, the organization was in operation and there were no notifications of the upcoming liquidation of the legal entity in the Unified State Register of Legal Entities. Already after February 24, 2022, the Russian branch of Leica Camera issued declarations of conformity for binoculars and scopes.
In response to a subsequent request from The Insider, Leica explained the renaming by the fact that it is impossible to close a company in Russia in one day, and a CEO is required to implement this decision. The company's new name, "Evening Star", was chosen as a sign that Lake was winding down its operations.
Registration of new declarations was necessary to continue work in other countries of the EAEU, according to the company. They assure that they stopped sales in Russia, and they renamed their Russian daughter to commemorate this decision. At the same time, The Insider found Leica binoculars, scopes and rangefinders on free sale in Russia, but the German company claims that these products were smuggled into Russia.
“With the outbreak of the Russia-Ukraine conflict, any supply of Leica products to Russia (or Belarus) was immediately stopped,” the company said in a response. — Decisions to exit the Russian market and disband Leica Camera Russia remain in force and remain unchanged. The liquidation and dissolution of a company is a lengthy process that can take several months. The name change was chosen as one of the initial steps to liquidate the company. It was supposed to be an additional clear sign of the departure of Leica Camera from Russia, in particular, the chosen name: "Evening Star". Accordingly, since then, the purpose of the company has been limited to liquidation and dissolution.
The structure of the company's share capital has not changed. The main shareholder of the company is still Leica Camera Austria GmbH, which is itself owned by the Leica Camera Group. The decision to use Leica Camera Austria as an intermediary shareholder was made based on the experience of Leica Camera Austria in the Central Asia sales region.
The management has remained the same, in part because Russian law requires a “general director” to carry out the liquidation of a company. This management is appointed to carry out the dissolution of the company.
According to the reporting of Lake Camera Russia LLC, published on the website of the Federal Tax Service, as of December 31, 2021, the trading stocks of the Russian subsidiary were estimated at 168.75 million rubles. A year later, on December 31, 2022, inventories decreased to the level of 104.59 million rubles, while the cost of sales for this period amounted to 163.62 million rubles. That is, Leica Camera Russia was supposed to launch new products or replenish stocks in another way for 99.64 million rubles during 2022.
Leica Camera's response to The Insider states that all of these shipments were made in the first three months of 2022.
“The cost of sales was formed in the 2022 calendar year almost entirely in the first three months. Product group — wholesale trade in photo and optical goods. With the beginning of the Russian-Ukrainian conflict, any supply of Leica products to Russia (or Belarus) was immediately stopped. In this regard, as of April 2022, Leica Camera Russia no longer carried out any turnover.”
Available tax reporting does not allow detailing expenses and incomes by months. If we believe the statement about the termination of turnover in April 2022, the cost of sales of Lake Camera Russia LLC in 2022 will look disproportionate. For the whole of 2021, this figure amounted to 260 million rubles, and for the three months of 2022 - 163 million rubles. However, this disproportion can be explained by the panic of the first war days in the retail market in Russia. According to the audit report (available to The Insider), deliveries from the Austrian Leika Camera AG to the Russian subsidiary in 2022 decreased by six times, while the cost of sales of the Russian company decreased significantly less. The same audit report confirms that at some point in 2022, Lake Camera Russia LLC did indeed stop sales in Russia.
At the same time, the Russian company received six new declarations of conformity for its products. Such a document is necessary for the sale of goods, it confirms that certain products comply with the technical regulations of the Customs Union. If the goods are produced outside the Customs Union, the importing company receives such a declaration. Leica Camera Russia LLC received three such declarations for red dot sights and night vision devices manufactured by Leica Camera AG.
- RU D-DE.RA04.V.66670/22 dated 07/06/2022 for "binoculars with a Leica rangefinder model 4058";
- RU D-DE.RA08.V.29610/22 dated 11/18/2022 for “Leica collimator sight model 3661”;
- RU D-DE.RA08.V.96727/22 dated 12/15/2022 for "binoculars with a Leica rangefinder model 6931".
In addition, Leica received documents for the import of watch straps and analog cameras. The last declaration RU D-DE.RA01.V.71275/23 for the import of paper bags was registered on 02/09/2023 - almost a year after the promise to leave the Russian market.
In response to The Insider, Leica Camera explained this by the fact that the company receives such declarations for work in other countries of the Common Economic Zone of the Customs Union, and not for Russia:
“These are EAC declarations that are necessary for the Eurasian Customs Union. Therefore, we still need EAC permission for other countries, despite the fact that doing business in Russia or any supply to Russia has been stopped since Russia started the war against Ukraine. Please note that since the start of the Russian-Ukrainian conflict, there has not been a single shipment of Leica products to Russia (or Belarus), and no one has been authorized to do so. In addition, distribution agreements always contain a clause that clearly defines the territory of the contract. Sales to countries outside the contract area are prohibited.
In addition, immediately after the start of the war, an additional export control declaration was prepared for distribution partners in the Central Asian region. Among other things, this declaration contains references to special sanctions and embargo rules applicable to Russia, and expressly refers to the Dual Use Ordinance and the Foreign Trade and Payments Act and Ordinance (AWG/AWO). Trading partners must also expressly state that they will not export Leica products to Russia or Belarus. This declaration was presented to trading partners and signed by their management. These are the declarations made by the Leica Camera Group.”
A single declaration of conformity for the import of binoculars and optical sights from the Russian daughter Leika was issued back in January 2020. The company called additional four declarations received by the director of the Russian branch Klaus Hauer a misunderstanding and explained that, for example, the Russian subsidiary received a declaration of conformity for the import of branded paper bags for packaging products in stores for the Kyrgyz partner Leika.
The import you are referring to was a supply to a dealer from Kyrgyzstan (Realcom LLC). The delivery includes paper shopping bags. The previous declaration has expired. Accordingly, in order to release packages from customs in Kyrgyzstan, it was necessary to issue a new declaration.
The position of the Leica Camera expressed in The Insider's response was confirmed by the lawyers of the EAC Portal company, who specialize in assisting in obtaining declarations of conformity for businessmen who are engaged in imports to the EAEU countries, including Russia. They indicated the need to obtain a declaration, but noted that a document received in any of the EAEU countries will automatically be valid in all other countries of the Customs Union.
“We could get it in Kazakhstan, for example, but in Russia it may be more convenient, there may be a question of the price for registration, this is optional, declarations are valid in all countries of the Customs Union,” the EAC Portal explained to The Insider.
At the same time, despite the termination of deliveries of the official branch, Leica products continue to arrive in Russia. Since January 1, 2023, 67 Leica riflescopes, binoculars and rangefinders for sale have been posted in the chat dedicated to buying shooting and hunting equipment. Representatives of the selling companies indicate that these are new deliveries for which they provide a guarantee. Optics available include:
- rangefinder binoculars Leica Geovid 10x42 3200 COM;
- Leica Geovid Pro 32 8x32; laser rangefinders Leica Rangemaster CRF 2400-R, CRF 2800.COM, CRF 3500.COM;
- Riflescopes Leica AMPLUS 6 1-6x24i L-4a, LEICA AMPLUS 6 2.5-15x50i L-Ballistic BDC;
- Leica AMPLUS 6 2.5-15x56i L-Ballistic BDC;
- Leica AMPLUS 6 3-18x44i L-Ballistic BDC MoA;
- Leica FORTIS 6 1-6x24i L-4a;
- Leica FORTIS 6 2-12x50i L-4a;
- Leica MAGNUS 1-6.3x24 i L-4a;
- Leica MAGNUS 2.4-16x56i L-4a;
- Leica PRS 5-30x56i PRB.
In addition to the listings listed, Leica Camera optics can be found in stock at at least eight online retailers. In one of these stores, The Insider offered to buy Lake's binoculars without a company warranty, but with a promise to fix everything at their own expense if the products turned out to be defective. Moreover, the seller does not hide the fact that all Leika products that he offers are "gray" imports. It is imported from the countries of the Customs Union, for example, Kazakhstan or Kyrgyzstan, and even from the European Union under the order. The editors were assured that any number of Leica products can be brought with a 100% prepayment, but the serial numbers on them will most likely be “knocked down”.
“We do not give a guarantee for goods because this is a third-party manufacturer,” the seller said. - If something happens to the goods, then call us, we will resolve the issue and get out of responsibility. We don't want to ruin the company's reputation. Yes, Leica is not officially supplied. It's all dragged through the mountains and so on. We now do not supply third-party manufacturers and substitute you know how, so the numbers and sights are shot down. If this is not in Russia, then all this can be brought, but the problem is that you will have to wait two weeks and 100% prepayment. You can get it, if so. If they are ready, then I take it, place the order, people write off the price, I describe it to you, and if everything suits, then it’s fine. You can bring everything, just a question of prepayment.
In addition to imports by individuals, Leica Camera products are also supplied by companies that issue official declarations. For example, on January 19, 2023, declaration RU D-DE.RA01.V.21008/23 for the import of Pinmaster II Leica laser rangefinders was received by Trade House Sphinx LLC. According to the public procurement portal, aggregated by the Tenderscope service, this company is a supplier of various structures of the Ministry of Internal Affairs and participated in 38 public procurements worth over 35 million rubles. Among its customers is the Armaments Department of the Federal Security Service of the Russian Federation .
In addition to scopes, rangefinders and binoculars, Leica cameras continue to arrive in Russia. So, on May 24, 2023, the EAEU certificate of conformity RU C-DE.AYA46.A.29302/23 for 300 cameras of the Leica Q2 model was received by the logistics company Atlas LLC from Vladivostok. The retail price for such a camera in the EU is around €5,030. Even with a 30% retailer mark-up deducted, the amount of such an order should be €1.05 million, which makes this deal significant even on the scale of €450 million of Leica's annual turnover in all the world.
The example of sales of a German manufacturer alone can illustrate the general conclusion that sanctions pressure cannot be complete without export controls not only against Russia, but also against all countries of the Customs Union. Deliveries from the EAEU countries can easily reach Russian destinations without being tracked by either manufacturers or customs aggregators.