According to a Financial Times analysis of Russian filings, companies registered in British overseas territories exported $134 million worth of goods to Russia in 2024 in clear violation of UK sanctions.
The UK’s sanctions legislation on Russia, which has been extended to the region, prevents companies and individuals from enabling Russia to acquire military, dual-use or luxury goods, as part of Britain’s efforts to combat the Kremlin’s war. As part of efforts to deny the Machine access to advanced technology. Increasing pressures within the economy.
However, the lack of open ownership records in overseas territories complicates efforts to determine who is involved in these types of shipments. The Russian documents show that a large volume of controlled exports is being organized by shadowy entities, particularly in the British Virgin Islands.
According to an FT analysis of Russian documents, most of the 2024 shipments were made by Rise International Group, which sent $119 million worth of consumer electronics covered by UK controls, while it was traced to the BVI. was given as a fiduciary business.
The ownership and officers of the company, which does a lot of business around China, are unknown.
OMC Group, an agent that operates the address used by Rise in the BVI, said it did not advise clients on their operations. But it added: “In cases where irregularities are identified or suspected, we act immediately, take appropriate corporate action and file reports with the relevant authorities, such as The law requires.”
The rise case is typical of how shipping occurs across overseas territories. The BVI entity is listed as the exporter of the goods on Russian paperwork, giving an address in the territory’s capital Rodetown. However, the goods were physically shipped from China to Russia.
The FT also pointed to a separate case of $2.3 million worth of shipments to SMT-iLogic by the BVI in 2023, which the US placed under sanctions last year, as “acquiring technology of foreign origin”. It was declared a large-scale procurement network.
Since the July general election, UK Foreign Secretary David Lemmy has countered that “fighting kleptocracy will be the focus of the next Labor Foreign Office”, and focused specifically on the Overseas Territories.
“It’s clear the previous government didn’t prioritize this,” said a Labor source. “We’re just doing it.”
The findings highlight weaknesses within Britain’s policy to block Russia’s supply of key technologies used by the country’s military-industrial complex following a 2022 full-scale invasion of Ukraine.
According to a new report by the Transparency International Russia campaign group, Russia last year received about $350,000 worth of monolithic integrated circuits — a key component for the country’s military infrastructure — from a firm registered to a PO Box in Tortola, BVI. from
But campaigners note that these secret jurisdictions lead to wider problems. “We know that a large number of companies registered in the BVI have previously been involved in money laundering schemes,” said Vladislav Netyaev, TI Russia researcher and author of the report.
“We see that they act as intermediaries, but we know nothing about the ultimate beneficiaries.”
Earlier this week, members of the UK Parliament called on Lemmy to push for the establishment of public registers of beneficial ownership in territories and dependencies. The annual Joint Ministerial Council, where UK ministers meet their counterparts overseas, takes place this week.
“Simply put, we need public registers so we can follow the money to identify potential wrongdoing,” says the letter, signed by 41 UK MPs. “These registers are vital to identifying and stopping the flow of dirty money that damages the economy of the UK and our allies.”
In 2018 the UK Parliament voted to make ownership records public, and gave the Cayman Islands and the BVI a target deadline of December 2023, which they did not meet.
“The British Virgin Islands as a jurisdiction does not tolerate money laundering, tax evasion, or any form of illegal financial activity,” said BVI Prime Minister and Minister of Financial Services Natalio D. Wheatley.
“Where we identify, or are made aware of, financial crime, we will continue to take decisive action and support the UK and our partners.”
TI Russia’s analysis of trade data also pointed to a number of “red flags” in shipments to the UK, with some records missing key data or large round numbers for goods prices and weights. are shown.
For example, a Russian company made seven separate shipments of jet fuel and protective drying fluid to Britain in 2022, all weighing 15 million kilograms and worth $15 million.
The TI Russia report also highlights that the use of shell companies to enable sanctions violations in the UK is not limited to overseas territories: “mass registrars and office addresses in London and Edinburgh. The firms are also used for commercial shipments to Russia.”
These firms have “among their general and limited partners involved in previous money laundering schemes”.
Stephen Doughty, Minister for Overseas Territories, said: “We have convened ministers from across government, launched a full review of enforcement, and overseas territories to investigate and take action on any evidence of potential embargo breaches. are helping
“Enablers of any such action should be on clear notice – we will not hesitate to take action.”
