Russia Targets Ikea Unit Over $14 Million Customs-Duty Dispute

(Bloomberg) -- Russian authorities opened an administrative case against the local unit of Ikea for allegedly avoiding over 1 billion rubles ($14 million) in customs duties.

The Federal Customs Service in Moscow opened the case against the world’s biggest furniture retailer last year, claiming Ikea underestimated license fees in declarations from 2017 to 2020 and provided false valuations, according to documents seen by Bloomberg News. The allegations have not been reported previously.

Ikea is aware of the complaint and is disputing it, according to the press service of Ikea Torg LLC, which handles Russian imports for the company.

The Federal Customs Service did not immediately respond to a request for comment.

Russia is one of Ikea’s 10 biggest markets and it operates 17 stores in the country.

The case, which follows similar claims against Swedish clothing retailer Hennes & Mauritz AB that has led to a criminal investigation, highlights Russia’s reputation as an unpredictable market for investors. Last year amid the Covid-19 pandemic, direct foreign investment fell 70% to $9.7 billion, according to a United Nations report.

In 2014, Swedish beauty-products producer Oriflame was fined 1 billion rubles by Russian authorities for tax violations in a case that “seriously concerned the European business community,” the Association of European Businesses in Moscow said at the time.

©2021 Bloomberg L.P.