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.
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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.
Image: A Moscow showroom showing at least one car 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.
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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.
Image: 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.”
Image: 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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3:03
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.”
Britain has sent a senior commander and a small number of troops to Israel to help international efforts to monitor a fragile Gaza ceasefire following an American request.
John Healey, the defence secretary, revealed the deployment barely a week after Yvette Cooper, the new foreign secretary, said the UK had “no plans” to send soldiers.
The British Major General will work as the deputy to a US commander, who is tasked with running a civil-military coordination centre that is also expected to include troops from Egypt, Qatar, Turkey, and the United Arab Emirates.
The ceasefire deal, brokered by Donald Trump, between Hamas and Israel has created the “opportunity for a long-term peace”, Mr Healey said.
Image: Defence Secretary John Healey said Donald Trump had created the conditions for an end to the fighting. Pic: PA
“We have specialist experience and skills that we have offered to contribute,” he said, answering questions after delivering a lecture on wider defence issues to business leaders at an event in London on Monday evening.
The defence secretary said: “We can contribute to the monitoring of the ceasefire. That is likely to be led by others.
“We have also, in response to the American request, put a first rate two-star officer into a civilian-military command, as the deputy commander.
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“So Britain will play an anchor role, contribute the specialist experience and skills where we can. We don’t expect to be leading… but we will play our part.”
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2:50
Ceasefire in fragile state.
The British officer is being accompanied by a small team of UK military personnel, with expertise in planning.
The United States, for its part, is sending up to 200 troops to Israel. They will not enter Gaza.
The British contingent will also not be operating inside the strip.
A Ministry of Defence spokesperson said: “A small number of UK planning officers have embedded in the US led CMCC, Civil Military Coordination Centre, including a 2* deputy commander to ensure that the UK remains integrated into the US led planning efforts for Gaza post-conflict stability.
“The UK continues to work with international partners to support the Gaza ceasefire to see where the UK can best contribute to the peace process.”
Details about the US plans – headed by Central Command – to help facilitate the flow of humanitarian aid as well as logistical and security assistance into the territory emerged after Mr Trump brokered a ceasefire deal between Hamas and Israel on 10 October.
Image: Gazan mourners pray over the bodies of Palestinians killed by Israeli fire. Pic: AP
One official said the new team will help monitor implementation of the ceasefire agreement and the transition to a civilian government in Gaza.
It is separate to a planned international stabilisation force that would deploy into the territory to help secure the peace.
That force is a key part of Mr Trump’s 20-point peace plan.
In a sign of potential problems, though, The New York Times reported on Tuesday that countries that might contribute soldiers to the international force are nervous about putting boots on the ground while Hamas remains an armed group.
The arrival of British troops in Israel comes as the ceasefire deal remains under pressure, with Israel and Hamas accusing each other of breaching its terms.
Israel briefly resumed airstrikes over the weekend after its troops were reported to have come under attack.
Meanwhile, the Hamas-run health ministry in Gaza yesterday reported more than 50 deaths in the last 24 hours.
A current senior member of the King’s household was the head of royal protection at the time Prince Andrew allegedly asked one of his police officers to dig up dirt on Virginia Guiffre, Sky News has discovered.
Lord Peter Rosslyn, who is now Lord Steward and Personal Secretary to the King and Queen, was head of Royalty and Diplomatic Protection between 2003-2014.
It is not clear if Lord Rosslyn – known at the time as Commander Peter Loughborough – was made aware of Prince Andrew’s request. However, it reportedly happened in 2011 when it’s claimed Andrew wrote in an email that he passed the date of birth and confidential social security number of his accuser, Virginia Guiffre, to one of his close protection team to find out information about her.
Image: Lord Peter Rosslyn arriving at the Duchess of Kent’s funeral. Pic: PA
Sky News approached Lord Rosslyn for comment, which was passed to Buckingham Palace.
A palace spokesperson said: “As you may or may not be aware, Lord Rosslyn works for The Royal Household and thus this issue has been referred to me. However, since this matter relates to his time in service with the Metropolitan Police, they would be the appropriate body to approach with media enquiries of this nature.”
The Met Police had nothing further to add.
Police sources have told Sky News the officer (CPO) involved would have been expected to escalate this request from Andrew to his superiors.
While there may have been other members of senior staff between the CPO and Lord Rosslyn, the request should have been considered serious enough to be referred to the top of the Royalty and Diplomatic Service.
Those with knowledge of the royal household tell us Lord Rosslyn is one of the King’s closest and most trusted members of staff.
His role as Lord Steward involves managing all aspects of the King’s personal affairs, and the non-state business of the monarch.
Who is Lord Peter Rosslyn?
As well as being much respected by Queen Elizabeth II, and affectionately known as her “favourite policeman”, in 2014 Lord Rosslyn was appointed as Master of the Household of the then Prince of Wales and the Duchess of Cornwall at Clarence House.
In February 2003, he was made Lord Steward by the King, thereby becoming the “first dignitary of the King’s court” – a sign that the monarch wanted to keep him around.
While Andrew’s alleged attempts to smear Virginia Guiffre would have been morally wrong, he also would have been asking his police officer to put his career on the line.
Any attempt to use police databases to find information on an innocent individual not connected to a crime would have been a sackable offence, and unlawful.
In his statement on Friday, Prince Andrew again stressed that he vehemently denies the allegations against him.
A Buckingham Palace source told Sky News that the recent claims that have emerged are being viewed by the Royal Family with “very serious and grave concern” and “should be examined in the proper and fullest ways”.
Image: Prince Andrew’s signature
Andrew should give evidence to US authorities – minister
The revelation comes as a government minister said Andrew should give evidence to US authorities – and anger grows after it emerged he had been paying “peppercorn rent” for two decades.
Passages from the memoir released on Tuesday of the late Virginia Giuffre, who accused Prince Andrew of sexually assaulting her, provide further details of their alleged encounters.
Prince Andrew has always strenuously denied the allegations.
Business Secretary Peter Kyle said on Tuesday he would “support” Prince Andrew giving evidence to US prosecutors.
He added he would also support any decision by the Met Police to investigate allegations that Prince Andrew used a Met bodyguard to gain information on Giuffre.
It comes as anger continues to grow over Prince Andrew’s housing arrangements.
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16:52
‘Victims should be in driver’s seat’
‘Peppercorn rent’
The royal has only paid “peppercorn rent” for more than two decades at his Windsor mansion, according to a National Audit Office report published in 2005.
“Peppercorn rent” is a legal term used in leases to show that rent technically exists, so the lease is valid, but it’s nominal, often literally £1 a year or just a symbolic amount.
In practice, it means the tenant pays no rent.
It also shows he was required to pay a further £7.5m for refurbishments.
A document from the Crown Estate also shows he signed a 75-year lease on the property in 2003.
It reveals he paid £1m for the lease and that since then he has paid “one peppercorn” of rent “if demanded” per year.
The agreement also contains a clause which states the Crown Estate would have to pay Andrew around £558,000 if he gave up the lease.
Pressure is mounting on him to give up the 30-bedroom mansion.
Senior Tory Robert Jenrick called for Prince Andrew to live privately.
‘He has disgraced himself’
He said: “It’s about time Prince Andrew took himself off to live in private and make his own way in life.
“He has disgraced himself, he has embarrassed the royal family time and again. I don’t see why the taxpayer, frankly, should continue to foot the bill at all. The public are sick of him.”
Image: Virginia Giuffre’s posthumous memoir was released today. Pic: Reuters
Mr Kyle, however, said that would be a question for King Charles.
But he did say MPs could bring forward a motion to strip Prince Andrew of his remaining titles, adding it would be up to Speaker Sir Lindsay Hoyle to choose one of these motions for debate.
The chief executive of Lloyds Banking Group has warned that a tax raid on the banks could harm lending to households and businesses.
In an exclusive interview with Sky News at the government’s regional investment summit, Charlie Nunn urged the chancellor to ignore calls for a windfall tax on commercial banks even though the sector is enjoying record profits.
“If we are going to have the ability and the confidence to continue to lend into the real economy, to help households and businesses invest, we need to make sure that the financial services system and Lloyds Banking Group really remains healthy in that context,” he said.
Image: Charlie Nunn was appointed Lloyds boss in November 2020. Pic: PA
Britain’s four largest banks – HSBC, Barclays, Lloyds Banking Group and NatWest – posted record profits of £45.9bn last year and are on course for another bumper performance this year, thanks to higher interest rates.
Their financial success has raised speculation that the sector could be in the chancellor’s firing line at next month’s budget.
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Rachel Reeves could raise the bank surcharge – a levy on bank profits in addition to corporation tax.
The Conservative government cut the levy from 8% to 3% in 2023. Returning it to 8% could raise £2bn for a chancellor who needs to find anywhere up to £50bn to meet her fiscal rules.
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4:17
Chancellor faces tough budget choices
Some have suggested a separate windfall tax, which could raise closer to £8bn.
Mr Nunn said such a move risked undermining the health of a sector which underpins the country’s economic prosperity.
“Obviously, taxes are a matter for the government to look at. But it’s definitely one of the factors that impact our ability to support the real economy in the UK,” he said.
A raid on the banks would cause pain to a sector that is already facing substantial costs because of the car finance scandal.
Lloyds, one of the most exposed lenders, has set aside nearly £2bn to cover potential compensation arising from the Financial Conduct Authority’s (FCA) redress scheme.
The FCA established the scheme to draw a line under the long-running mis-selling scandal, in which lenders failed to disclose commission paid to brokers, meaning many customers ended up paying more than they should have for their car finance.
Under the FCA’s scheme, eligible customers – as many as 14.2 million – could receive an average of £700 each.
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4:21
Payouts due after motor finance scandal
There is mounting anger within the industry at the way the scheme, which is going out to consultation, has been set up. Mr Nunn said the proposal was too generous to customers and not proportionate to the harms actually caused to customers.
He did not rule out the possibility of a judicial review but, in the first instance, called for a rethink, warning that the current scheme risks scaring away investors, causing an exodus from the market and driving up the cost and availability of credit.
“When you look at the implication of what’s being proposed by the FCA, it’s going to potentially take 20 years of profitability of the car finance industry. And, what does that mean for invest ability in that industry and for other investors and businesses looking to invest in the UK? There’s real concern that this is going to create an invest ability issue,” he said.
“Our concern is will the industry continue to function? Will it support all customers across the whole of the UK that need finance? Will other investors be looking at this and wondering whether the UK is a place they should invest, if retrospectively we can take away 20 years of profits?”