British firms’ exports are almost certainly bolstering Russia’s war machine in Ukraine, Sky data analysis finds

Published

1 year ago

February 21, 2024

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British companies are exporting hundreds of millions of pounds of equipment and machinery which almost certainly ends up in Russia, undermining the official sanctions regime and bolstering Vladimir Putin’s war machine, according to data analysis from Sky News.

The items – which include drone equipment, optical supplies and heavy machinery – are being sent to countries in the Caucasus and Central Asia, including Kyrgyzstan, Armenia, Uzbekistan and others, from where they are understood to be forwarded on to Russia.

Ukraine war latest: Russia hits out at UK after prison bosses sanctioned over Navalny death

The numbers show that despite the sharp fall in the flow of goods to Russia, following the imposition of trade sanctions after its invasion of Ukraine two years ago, large volumes of sensitive, “dual use” British goods are still finding their way to Moscow.

The analysis underlines the scale of Britain’s participation in a shadow economy which helps keep Russia’s military supplied with parts and hardware for the weaponry it uses against Ukraine

Flows of British goods to Russia itself have fallen by 74% since the outbreak of war, following the imposition of sanctions. The vast majority of exports still flowing to Russia are food, medical products or other humanitarian items.

Flows of heavy machinery, electrical equipment and cars have dropped to nearly zero.

Those figures imply the sanctions regime has been incredibly successful, and indeed, a government spokesperson said: “We have implemented the most severe package of economic sanctions ever imposed on a major economy.”

However, closer examination of Britain’s official trade statistics provides an alternative prism.

They show that while UK exports to Russia have fallen sharply, UK exports to a suite of former Soviet satellite states – from Uzbekistan to Georgia – have risen at an unprecedented rate.

British exports to Kyrgyzstan, the small former Soviet satellite state, have risen at a breakneck rate, by over 1,100%. These exports are dominated by the heavy machinery and vehicles which can no longer be sent directly to Russia.

A Europe-wide problem

According to Robin Brooks, former chief economist of financial body the IIF, this is something which has been going on for some time, with other European countries, most notably Germany and Poland, also sending large quantities of hardware to Russia via these Caucasus and Central Asian states.

“They’re clearly getting an order from somewhere that is a Russian satellite that happens to be domiciled in one of these Central Asian countries,” he said.

“What happens then? Maybe there’s plausible deniability, maybe they know… all we know for sure is that the rise in export volumes that is happening is completely insane, and is inconsistent with any underlying data in these countries.

“So the only reasonable explanation is: Russia.

“From the Western European and especially the EU side, I would say, this has been going on for a while. It is at this point widely known in Brussels, and I think there is a key question as to why nothing is being done at a central EU level to stop this?”

British officials argue that they are constantly attempting to tighten the UK sanctions regime. A spokesperson told Sky News: “We also recently announced the creation of a new Office of Trade Sanctions Implementation to strengthen our enforcement of sanctions.

“Any non-compliance with these tough sanctions is a serious offence and punishable through large financial penalties or criminal prosecution.”

Exports to other Russia-adjacent states

However, the scale and breadth of the trade is striking. UK export volumes haven’t just spiked to Kyrgyzstan. They are also up nearly as sharply to Armenia, which, according to Mr Brooks, has recorded a sharp increase in its onward goods exports to Russia.

Doubly worrying is the fact that among the goods being sent to these countries are significant quantities of items considered “dual use” – which can be repurposed into weaponry.

Found in battlefield remains of Russian weapons

The European Union has a list of 45 categories of goods – “common high priority items” as they call them – which have been found in battlefield remains of Russian weapons.

Sky News analysis shows that British exports to four Caucasus and Central Asian states of these goods, which have been documented as being used to kill Ukrainian citizens – have risen by over 500% since the outbreak of war.

The analysis shows that by far and away the biggest category of goods being sent to these four Caucasus and Central Asian nations was “parts of aeroplanes, helicopters or unmanned aircraft” – in other words, equipment which can be used to make drones and other aeronautic units.

British companies have exported £6m worth of these goods to the four countries, above what they historically tend to export to them.

Other items being sent by UK exporters include data processing machines, aeronautic navigation equipment and radio navigation aids.

According to Tom Keatinge of RUSI: “It’s absolutely a red flag if you’re producing that kind of equipment… and you’ve got this big spike in exports to Kyrgyzstan.

“You’ve surely got to stop and ask yourself: why is that? Am I indirectly resourcing the Russian military? And clearly you don’t want to be doing that. And indeed, in doing that, you’re probably in breach of sanctions.

“The tragedy is that whenever the Ukrainians dissect a drone, or a cruise missile or communications equipment that they get their hands on, there are components in those bits of equipment that come from the EU, that come from the UK and come from the US, and have been manufactured since February 2022.

“So these are fresh exports, these are not legacy exports.”

Business

Poundland to stop paying rent at hundreds of stores in rescue deal

Published

14 hours ago

June 16, 2025

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Poundland to stop paying rent at hundreds of stores in rescue deal

Poundland will halt rent payments at hundreds of its shops if a restructuring of the ailing discount retailer is approved by creditors later this summer.

Sky News has learnt that Poundland’s new owner, the investment firm Gordon Brothers, is proposing to halt all rent payments at so-called Category C shops across the country.

According to a letter sent to creditors in the last few days, roughly 250 shops have been classed as Category C sites, with rent payments “reduced to nil”.

Poundland will have the right to terminate leases with 30 days’ notice at roughly 70 of these loss-making stores – classed as C2 – after the restructuring plan is approved, and with 60 days’ notice at about 180 more C2 sites.

The plan also raises the prospect of landlords activating break clauses in their contracts at the earliest possible opportunity if they can secure alternative retail tenants.

In addition to the zero-rent proposal, hundreds of Poundland’s stores would see rent payments reduced by between 15% and 75% if the restructuring plan is approved.

The document leaves open the question of how many shops will ultimately close under its new owners.

A convening hearing has been scheduled for next month, while a sanction hearing, at which creditors will vote on the plan, is due to occur on or around August 26, according to one source.

The discounter was sold last week for a nominal sum to Gordon Brothers, the former owner of Laura Ashley, amid mounting losses suffered by its Warsaw-listed owner, Pepco Group.

Poundland declined to comment.

Business

Israel-Iran conflict poses new cost of living threat – here’s why

Published

19 hours ago

June 16, 2025

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Israel-Iran conflict poses new cost of living threat - here's why

The UK’s cost of living crisis hangover is facing fresh pressure from the Israel-Iran conflict and growing tensions across the Middle East.

Whenever the region, particularly a major oil-producing country, is embroiled in some kind of fracas, the potential consequences are first seen in global oil prices.

The Middle East accounts for a third of world output.

Money latest: ‘Unusual movement’ in house prices

Iran’s share of the total is only about 3%, but it is the second-largest supplier of natural gas.

Add to that its control of the key Strait of Hormuz shipping route, and you can understand why any military action involving Iran has huge implications for the global economy at a time when a US-inspired global trade war is already playing out.

What’s happened to oil prices?

Global oil prices jumped by up to 13% on Friday as the Israel-Iran conflict ramped up.

It was the biggest one-day leap seen since Russia invaded Ukraine in February 2022, which gave birth to the energy-driven cost-of-living crisis.

From lows of $64 (£47) a barrel for Brent crude, the international benchmark, earlier this month, the cost is currently 15% higher.

Iran ships all its oil to China because of Western sanctions, so the world’s second-largest economy would have the most to lose in the event of disruption.

Should that happen, China would need to replace that oil by buying elsewhere on the international market, threatening higher prices.

How are natural gas prices holding up?

UK day-ahead prices are 15% up over the past week alone.

Europe is more dependent on Middle East liquefied natural gas (LNG) these days because of sanctions against Russia.

The UK is particularly exposed due to the fact that we have low storage capacity and rely so much on gas-fired power to keep the lights on and for heating.

Israel-Iran latest: Tehran threatens to leave nuclear treaty

The day-ahead price, measured in pence per therm (I won’t go into that), is at 93p on Monday.

It sounds rather meaningless until you compare it with the price seen less than a week ago – 81p.

The higher sum was last seen over the winter – when demand is at its strongest.

What are the risks to these prices?

Market experts say Brent crude would easily exceed $100 (£74) a barrel in the event of any Iranian threats to supplies through the Strait of Hormuz – the 30-mile wide shipping lane controlled by both Iran and Oman.

While Iran has a history of disrupting trade, analysts believe it will not want to risk its oil and gas income through any blockade.

What do these price increases mean for the UK?

There are implications for the whole economy at a time when the chancellor can least afford it, as she bets big on public sector-led growth for the economy.

We can expect higher oil, gas and fuel costs to be passed on down supply chains – from the refinery and factory – to the end user, consumers. It could affect anything from foodstuffs to even fake tan.

Increases at the pumps are usually the first to appear – probably within the next 10 days. Prices are always quick to rise and slow to reflect easing wholesale costs.

Energy bills will also take in the gas spike, particularly if the wholesale price rises are sustained.

The energy price cap from September – and new fixed-term price deals – will first reflect these increases.

How does this all play out in the coming months?

So much depends on events ahead.

But energy price rises are an inflation risk and a potential threat to future interest rate cuts.

While LSEG data shows financial markets continuing to expect a further two interest rate cuts by the Bank of England this year, the rate-setting committee will be reluctant to cut if the pace of price growth is led higher than had been expected.

At a time when employers are grappling with higher taxes and minimum pay thresholds, and consumers a surge in bills following the ‘awful April’ hikes to council tax, water and other essentials, a fresh energy-linked inflation spike is the last thing anyone needs.

Business

Farming: Cost of rural crime in Wales at its highest in more than a decade

Published

1 day ago

June 16, 2025

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Farming: Cost of rural crime in Wales at its highest in more than a decade

The cost of rural crime in Wales is at its highest in more than a decade, a new report has revealed.

Last year, rural crime cost an estimated £2.8m in Wales, according to insurance provider NFU Mutual.

That’s an 18% increase on the previous year, with Wales the only UK nation to have seen a rise.

For farmers like Caryl Davies, that makes their work harder.

The 21-year-old farms on a beef and sheep farm in Pembrokeshire.

She told Sky News that having the quad bike stolen from her family farm last August had made them feel “really unsafe at home”.

The fact it happened in such a rural area was a “really big shock” for Ms Davies and her family.

“We’d rely on the bike day in day out, to look after our cows and sheep, and it’s had a really negative impact on us,” she said.

The cost of replacing a bike exactly like theirs would be “close to £10,000”.

“They’re a really expensive piece of kit, but you can’t be without them, especially in these rural areas where we’ve got the mountain and maybe places that aren’t very accessible,” she added.

“The bike is totally crucial for our day-to-day running of the farm.”

The incident was caught on camera in the calving shed, but the Davies family have since invested in an enhanced CCTV system. That comes at an additional cost.

“For some farmers, this is spare money that we haven’t really got,” Ms Davies added.

“Farming is hard enough as it is, without people stealing your things and having to spend this extra money on making your home farm safe.”

The total cost of rural crime across the UK has fallen since 2023 – down from £52.8m to £44.1m.

Quad bike and All Terrain Vehicles (ATVs) remained the top target for thieves during the past year, NFU Mutual’s figures show.

James Bourne farms in Pontypool, Torfaen, and claims to have had over 200 sheep stolen from common land adjoining his farm over a four-year period.

The 32-year-old told Sky News that losing sheep from his herd was a “big hit” on his business as well as the young family he is trying to support.

“The way agriculture is at the moment anyway, we’re struggling to make ends meet, and any profit that is in it is obviously being taken from me,” he said.

“So I really need to try and find out and get to the bottom of where they’re going because obviously it’s an ongoing issue.”

Andrew Chalk, from NFU Mutual, told Sky News that while there had been a “significant drop” across the UK, there were “worrying signs”.

“In Wales, especially, rural crime’s gone up which just shows that organised criminals are looking for ways to target the countryside again and again,” he said.

“What we’ve found increasingly is that organised criminals are targeting certain areas of the countryside, so they’re hitting multiple farms in one night.

“They’re raiding them, they’re moving away to another area and then hitting multiple farms there. So it is hugely concerning.”

Mr Chalk said NFU Mutual had also heard reports of criminals using drones and other equipment to “look at the lay of the land”.

“What it does show is that organised criminals are always going to find new ways to target rural crime and that’s why we need to be on top of it and to work together to actually disrupt them,” he added.

Police forces in Wales say they are aware of the “significant impact” that rural crimes have on those affected.

A Dyfed-Powys Police spokesperson said the force had acquired new technology to help combat rural crime, including “advanced DNA asset-marking kits” and hopes to “empower farmers with effective tools and advice”.

The spokesperson acknowledged the difficulty of patrolling the entire police force area, “given the huge area” it has to cover, and thanked rural communities for their “continuing vigilance and for reporting any suspicious activity”.

Temporary Chief Superintendent Jason White, from Gwent Police, said the force would be “increasing resources” within the rural crime team throughout this financial year and urged anyone in a rural area who believes they have been a victim of crime to get in touch.