New regulations due to take effect from October 1, 2002, to regulate the luggage trade between Russia and Türkiye stalled as both sides side-step the issue. It matters that the 2002 figure for ex-gratia garment trade is estimated at $1.5 billion. Registered export trade in garments is worth $500 million.

The new deal was hatched to reduce the limit from its current $15,000 worth of items that an individual or company could buy or sell to $5,000, and by January 1, 2003, to a ‘gift value’ of $1,000. Most trades exceed the $15,000 limit anyway. Russia was to agree to a reduction of tax on imported leather garments from Türkiye. However, firms contacted are unfamiliar with any existing taxes. Goods usually accompany the buyer but, latterly, cargo companies have joined the parade and cash settlement terms prompted hauliers to dispense with a 30% tax levied on transit goods. This is a honey pot that has stubbornly resisted change. Russian trade experts recently came to wrap up details with Turkish colleagues at the insistence of regulatory bodies.

However, decisions instead focused on maintaining the status quo, particularly when some 8 million Russians benefit directly from the luggage trade. Traders simply cannot resist the economic and less bureaucratic benefits of operating on the fringe. As long as bureaucrats in both countries are seen as a privileged elite, ex-directory cash transactions will prevail.