How UK-made cars are finding their way to Russia’s showrooms
British carmakers appear to have continued selling hundreds of millions of pounds of luxury vehicles to Russia even after the invasion of Ukraine and the imposition of sanctions, exporting the cars indirectly via former Soviet states, Sky News analysis suggests.
While direct British car exports to Russia have fallen to zero following the invasion of Ukraine in 2022, that collapse has been followed by a corresponding increase in car exports to countries neighbouring Russia, most notably Azerbaijan.
Our analysis, based on official HMRC trade data, finds that the UK exported £273m of vehicles to Azerbaijan last year, a 1,860% increase compared with the five-year period preceding the invasion.
Not only is the increase in exports to Azerbaijan unprecedented, it is of a similar magnitude to the annual car exports to Russia in the two years before the imposition of sanctions, which averaged £330m.
Alongside the UK HMRC statistics, Sky News has analysed UN international trade data which shows that over precisely the same period that Britain recorded an unprecedented increase in car exports to Azerbaijan, Azerbaijan recorded an unprecedented increase in car exports to Russia.
The data chimes with testimony from Sky sources, who told us that while Russian car buyers sourcing German vehicles have primarily sent them via Kyrgyzstan, they prefer to use Azerbaijan as a route for British cars.
British carmakers insist that they are no longer selling cars to Russia. And the government data, collected by the HMRC on all goods leaving the country, do not constitute proof that the cars ended up in Russia. It is impossible to track each British consignment once it has left port, especially once it has arrived at a third country.
However, the government is concerned about this grey area, whereby goods may be sent to Russia via former Soviet satellite states in the Caucasus and central Asia.
A Moscow showroom showing at least one model for sale.
Cars are among the items banned from Russia under the so-called “dual use” sanctions regime. There is a specific ban of the sale of luxury cars – those worth more than £42,000 – to Russia.
The HMRC database, which also shows the count of cars sold as well as the total value, reveals that the average value of UK cars exported to Azerbaijan was more than £100,000 – suggesting that the consignments are primarily or exclusively luxury cars.
Britain’s motoring lobby group the SMMT said: “UK vehicle manufacturers are committed to full compliance with all current and future trade sanctions.
“While trade flows can vary and, indeed, be quite volatile with growing economies, there is no available evidence to indicate a lack of compliance with existing sanctions, but manufacturers will remain vigilant, and would condemn any party that puts their commitment to compliance at risk.”
Sanctions experts said part of the challenge in combating the flow of goods to Russia via third countries (as appears to be happening in this case) is that it is very difficult, sometimes near impossible, to track those consignments once they enter those other countries.
Portbury in Bristol is one of the UK’s main ports to handle the import and export of motor vehicles.
Tom Keatinge, Director at the Centre for Financial Crime & Security Studies, Royal United Services Institute says: “There are obviously very close economic ties between places like Azerbaijan, Armenia and Russia, they sit within a kind of common economic area. And so really, once the good is in that area, your ability to track it as the manufacturer in the UK is lost.
“What you should of course, be asking yourself, when it comes to exporting that car, or whatever it might be initially is, ‘Do I really think that this exporter who’s suddenly come out of nowhere to buy 100 cars Is actually importing cars only into that third country? Or might they be trying to make money out of circumventing sanctions and selling that onward into Russia?'”
Rolls-Royce, which is owned by BMW, said: “Rolls-Royce Motor Cars ceased production and supply of cars for the Russian market in late February 2022, before international trade sanctions were put in place. In the meantime, governments have implemented far-reaching sanctions, which we fully comply with and support.
“Retail sales of cars to clients are managed by our global dealer network, comprised of independently owned and operated businesses. Our global dealer network is contractually obliged to follow all applicable national and international legal regulations, including those relating to export control.
“If any new Rolls-Royce motor car has been imported into Russia since late February 2022 this has been done so without the knowledge or support of Rolls-Royce Motor Cars.”
A 2023 Bentley car is shown for sale on a Russian franchise dealership’s website.
Pic: Bentley Moscow
A representative from Bentley, owned by VW, said: “We are committed to full compliance with all current and future trade sanctions and there is no evidence to suggest a lack of compliance with existing sanctions, or indeed a change of sales trend in Azerbaijan.”
While the HMRC data does not identify specific carmakers or consignments, it does show that the port most used for this particular trade from the UK was the Port of Bristol, which had never previously exported more than a few million pounds worth of goods each year to Azerbaijan. In the two years following the invasion it saw those exports shoot up to more than £100m a year. The Port of Bristol did not respond to Sky News’s requests for a comment.
For the UK as a whole, the dramatic rise in car exports to Azerbaijan stands out in the trade statistics. In the space of a couple of years, this state of 10 million people, with a GDP around the same size as Ghana, has become the UK car industry’s 16th biggest export destination by value, ahead of Austria, Portugal and Sweden.
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Feb: Is Russia beating UK sanctions?
Sky News has previously shown that many other banned items, including those known to have been repurposed as weapons, have been sent to former Soviet states in the Caucasus and Central Asia, including Kyrgyzstan and Armenia. Those states have all recorded sharp increases in their exports to Russia.
Britain’s sanctions minister Anne-Marie Trevelyan said: “The work of investigative journalists and NGOs’ continuing efforts to highlight circumvention are an important part of our collective efforts to track and evidence Putin’s abhorrent crimes.
“We have introduced the largest and most severe package of sanctions ever imposed on Russia or indeed any major economy with 2,000 individuals and entities under the Russia regime. Alongside our international allies we’ve been clear no country should be propping up Russia’s war machine.
“We continue to bear down on those who do business with Putin and his cronies, including sanctioning individuals who try to bypass our sanctions, and working with partners and a range of third countries to stem the flow of goods into Russia.”
US sanctions against Russia’s two largest energy companies, the state-owned Rosneft and privately held Lukoil, are perhaps the most significant economic measures imposed by the West since the invasion of Ukraine.
If fully implemented, they have the potential to significantly choke off the flow of fossil fuel revenue that funds Russia’s war machine, but their power lies not in directly denying Russia access to the tankers, ports and refineries that make the oil trade turn, but the US financial system that greases the wheels.
Ever since the invasion, the Russian government has proved masterful at evading sanctions, aided and abetted by allies of economic convenience and an oil industry with decades of experience.
Ukraine war latest: Zelenskyy expresses relief at Trump move
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New US sanctions on Russia: What do we know?
While the West, principally the EU, has largely turned off the taps and stopped buying Russian oil, China, India and Turkey became the largest consumers, with a shadow fleet of tankers ensuring exports continued to flow.
Data from the Centre for Research into Energy and Clean Air (CREA) shows that while fossil fuel revenues have fallen from more than €1bn a day before the war, they have remained above €600m since the start of 2023, only dipping towards €500m in the last month.
None of that oil has been heading for the US, but these sanctions will directly impact the ability of the Russian companies, and anyone doing business with them, to operate within America’s financial orbit.
According to the order from the US Office for Foreign Asset Control, the sanctions block all assets of the two companies, their subsidiaries and a number of named individuals, as well as preventing US citizens or financial institutions from doing business with them.
It also threatens foreign financial institutions that “facilitate transactions… involving Russia’s military-industrial base” with direct or secondary sanctions.
Vladimir Putin chairs a meeting in Moscow.
Pic: Sputnik/Reuters
In practice, the measures should prevent the two companies from accessing not just dollars, but trading markets, insurance and other services with any financial connection to the US.
Taken in harness with similar steps announced by the UK earlier this month, analysts believe they can have a genuinely chilling effect on the market for Russian oil and gas.
Russia’s customers for oil in China, India and Turkey will also be affected, with the largest companies, state-owned and private, expected to be unwilling to take the risk of engaging directly with sanctioned entities.
Indian companies are already reported to be “recalibrating” their imports following the announcement, which came just a week after Donald Trump announced an additional 25% import tariff on Indian goods as punishment for the country’s reliance on Russian oil.
Read more:
Russia has responded with bravado to US sanctions
Trump imposes sanctions on Russia’s two biggest oil firms
That does not mean that Russian oil and gas exports will cease. There are other unsanctioned Russian energy companies that can still trade, and ever since the first barrel of oil was tapped, the industry has proved adept at evading sanctions intended to interrupt its flow from one country or another.
Any significant increase in the oil price beyond the 5% seen in the aftermath of the announcement could also put pressure on the White House, which is at least as sensitive to fuel prices at home as it is to foreign wars.
But analysts Kpler expect the sanctions to cause “an immediate, short-term hiatus in Russian crude exports, as it will take time for sellers to reorganise and rebuild their trading systems to circumvent restrictions and ease buyers’ concerns”.
And Russian gas will, for now, continue to flow into Europe, where distaste for Vladimir Putin‘s imperial ambitions has not killed the appetite for his fuel. While the EU has this week imposed sanctions on liquified natural gas (LNG), they will not be fully enforced until 2027.
World
Dublin protests: Prams filled with fireworks as teens – and children as young as seven – clash with police
At least 23 people have been arrested during a second night of violent disorder near an asylum hotel in Dublin.
Two police officers were taken to hospital with injuries sustained during clashes with protesters – including one who was struck on the head by a bottle.
A Sky News crew was caught in the confusion as police charged at crowds, who were throwing fireworks, stones and other debris.
Pic: PA
It is the third night of demonstrations at the Citywest Hotel following an alleged sexual assault in the early hours of Monday morning.
A demonstration in the wake of the incident, which allegedly involved a 10-year-old girl, turned violent on Tuesday night. A police officer was injured and six arrests were made.
A 26-year-old man, who cannot be named due to rules that apply to all sexual assault cases in the Republic of Ireland, appeared in court on Tuesday charged over the alleged attack.
Gardai officers block protesters near the Citywest Hotel in Dublin. Pic: PA
Police had earlier pledged a “robust response” if the violence continued.
Between 7pm and 8pm, hundreds of protesters faced off with around 40 uniformed officers.
The uniformed officers were replaced with the Public Order Unit, who were carrying plastic shields and additional body protection.
A police van was set on fire on Tuesday night.
Protesters detained after stand-off
Hundreds of protesters had been facing off against the public order unit of the Irish police force along Citywest Drive.
While large parts of the crowd dispersed throughout the night, an additional public order unit was deployed to tackle those remaining at the protest shortly after 10pm.
A number of protesters have been detained after fireworks and rocks were thrown at police. Pic: PA
Several of those caught between the two units were tackled and detained as they tried to flee.
Justice minister Jim O’Callaghan said “many have been arrested” and “more will follow” – and went on to praise officers who had responded professionally to “thuggish violence” in the area.
Mr O’Callaghan vowed that those arrested would be “charged, named and dealt with relentlessly” by the criminal justice system.
World
Donald Trump imposes sanctions against Russia’s two biggest oil companies as frustration grows with Vladimir Putin over the Ukraine war
Donald Trump has imposed sanctions on Russia’s two largest oil companies – and spoke of his frustration with Vladimir Putin.
In a major policy shift, new restrictions have been unveiled against Rosneft and Lukoil – as well as dozens of subsidiaries – due to “Russia’s lack of serious commitment to a peace process to end the war in Ukraine”.
“Now is the time to stop the killing and for an immediate ceasefire,” Treasury Secretary Scott Bessent said in a statement.
“Given President Putin’s refusal to end this senseless war, Treasury is sanctioning Russia’s two largest oil companies that fund the Kremlin’s war machine. We encourage our allies to join us in, and adhere to, these sanctions.”
The move marked a significant change for the Trump administration, which has veered between pressuring Moscow and taking a more conciliatory approach aimed at securing peace in Ukraine.
US Treasury Secretary Scott Bessent speaks to reporters at the White House. Pic: Reuters
Trump frustrated with Putin
The US president has resisted pressure to impose energy sanctions on Russia, hoping that Putin would agree to end the fighting. But with no end in sight, he said he felt it was time.
Mr Trump explained he has a “very good relationship” with his Russian counterpart, but felt he had to cancel their planned meeting as “it didn’t feel right to me”.
In a sign of growing frustration, he told reporters: “It didn’t feel like we were going to get to the place we have to get. So I cancelled it. But we’ll do it in the future.
“I have good conversations. And then, they don’t go anywhere. They just don’t go anywhere.”
He also hinted that the sanctions could be lifted if the Russian president was prepared to cooperate in peace talks.
“We hope that they [the sanctions] won’t be on for long,” he said in the Oval Office. “We hope that the war will be settled.”
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Putin-Trump talks: The view from Moscow
Trump wants Xi to help with Ukraine
Ahead of a meeting next week with Chinese President Xi Jinping in South Korea, Mr Trump said he would like Beijing to help put pressure on Moscow to halt the fighting.
“I think he [Xi] can have a big influence on Putin. I think he can have a big influence … he’s a respected man. He’s a very strong leader of a very big country. And we will certainly be talking about Russia-Ukraine,” he said.
Xi and Putin have formed a strategic alliance between their countries.
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Why Tomahawks are off the table
Ukraine denied Tomahawk missiles
However, Mr Trump warned he is not prepared to provide Ukraine with long-range Tomahawk missiles, which Kyiv has requested.
He explained it would take the Ukrainians up to a year to learn how to use the “highly complex” weapons.
“The only way a Tomahawk is going to be shot … is if we shot it. And we’re not going to do that.
“It takes a year of intense training to learn how to use it, and we know how to use it, and we’re not going to be teaching other people.”
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