In 2003, contraband trade became a serious problem in the Russian country of Georgia. The trade of contraband through the Georgian routes of Abkhazia and South Ossetia became worse due to the fact that it is closely connected to the problem of separatism, unresolved armed conflicts, violence in the regions, and transparency of borders. This paper discusses the sanctions placed on the secessionist government of Abkhazia, as well as the impact of these sanctions which created an extremely favorable setting for smuggling. The situation demonstrates that the conflicts in Abkhazia and South Ossetia have gradually been transformed into uncontrolled territories known as crime zones. The smuggling networks established in Abkhazia and South Ossetia increased the crime rate, created corrupt economic interests and contributed to the existing political status quo and foreign conflicts. The main reasons for smuggling in these regions are institutional weakness and corruption in law enforcement bodies, and the absence of initiative among previous leaders of the supreme executive branch of the Government of Georgia. Proposed strategies and recommendations in destroying contraband markets are presented and discussed.