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. Last Updated: 07/27/2016

Open Road Beckons to Metals Smugglers

MOSCOW - Dmitry Stepankov, 26, a self-confessed aluminum smuggler, claims that the money he earns "makes him a someone, not a no one".


Despite having missed out on the glory days of aluminum smuggling in late 1991, when aluminum could be bought for 2, 000 rubles (then $25) a ton, and the borders of the ex-U. S. S. R. had already collapsed, Stepankov claims to have banked $65, 000 in Switzerland over the last year. Aluminum now trades on Russian exchanges for about $700 a ton, just over half the world price.


Russian metals exports, like other "strategic" raw materials exports, are governed by a quota and license system introduced in April last year.


But Russia's open borders, corrupt officials, stiff export tariffs and exchange rules mean that hundreds of thousands of tons of non-ferrous metals now leave Russia without papers each year.


Illegal exports include not just aluminum but also copper, chrome, nickel and many other non-ferrous metals, as well as special manganese and chrome alloy steels and rare earth-group metals.


Figures as to the worth of this trade can only be guessed at, but an official at Russia's State Committee for Metals estimates that metals worth perhaps $2 billion left Russia without papers last year.


Stepankov, who sidelines in cigarette dealing, buys job-lots of scrap and stolen metal ingots where and when he can, with sources including the scrap metal kiosks which have sprung up around Moscow. He also buys stolen metal from the back door of several government factories, including the Banner of Labor fighter aircraft plant in Moscow.


Each month he and his partner, Alexei Makarov, 25, organize a six-truck convoy and drive toward Estonia, timing their journey so as to pass the border in the dead of night. Some 185 unguarded roads link the Baltic state with Russia. Estonia, despite possessing no natural resources, is now reckoned to be the world's leading non-ferrous metals exporter.


Most illegal Russian exports are on a larger scale, traveling by rail, and are backed by fake paperwork. A common trick involves sending metals to the Russian enclave of Kaliningrad on the Baltic Sea. The rail route to the enclave passes through Lithuania, where the aluminum is unloaded and the paperwork forgotten.


Stepankov does not fear the ordinary customs guards, paid 25, 000 rubles ($22) a month. "If they catch us, they get paid; if they don't, they don't", he explains.


Stepankov does fear a KGB-crackdown such as Operation Trawl, an anti-smuggling campaign that ran for two months last year and netted $200 million worth of goods on the Lithuanian, Latvian and Estonian borders. Operation Trawl put two of Stepankov's friends behind bars.