Russia sanctions: Fears over UK enforcement by HMRC
Fears have been raised over the robustness of Britain’s trade sanctions against Russia after the main government department enforcing the rules admitted it has no idea how many cases it is investigating.
HM Revenue and Customs (HMRC), which monitors and polices flows of goods in and out of the country, says it had no central record of how many investigations it’s carrying out into Russian sanctions. It also said that while it had issued six fines in relation to sanction-breaking since 2022, it would not name the firms sanctioned or provide any further detail on what they did wrong.
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The disclosures were part of a response to a Freedom of Information (FOI) request from Sky News, as part of its wider investigation into the sanctions regime against Russia.
In recent months we’ve reported on data showing flows of goods, including dual-use items which can be turned into weapons, from the UK into Caucasus and Central Asian states. We’ve shown how luxury British cars are being transported across the border from the Caucasus into Russia. And we’ve shown the contrast between rhetoric and reality on the various rules clamping down on trade in Russian fossil fuels.
But despite the challenges facing the sanctions regime, information on the enforcement of those sanctions is quite scant. The Office of Financial Sanctions Implementation (OFSI) has so far only imposed a single £15,000 fine for breach of financial sanctions – in other words those moving money in or out of Russia or helping sanctioned individuals do so.
HMRC has so far issued six fines in relation to Russian sanctions, but it refused to name any companies or individuals affected by the fines – or to provide any further details on what they were doing to break the rules. And, unlike other organisations, such as OFSI, it has never said how many cases it is working on – giving little sense of the scale of the pipeline of forthcoming action.
Fines
Asked by Sky News to provide such details under FOI legislation, HMRC said: “The number of current investigations which may involve these sanctions, regardless of the eventual outcome, is not centrally recorded.
“To determine how many investigations are within scope of your request would require a manual search of a significant number of records, held by different business areas. Not all investigations reach the level of formal cases being opened, but these investigations are still recorded as compliance activity which would need to be manually reviewed to provide an answer.”
Read more:
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Mark Handley, a partner at law firm Duane Morris, has spent years monitoring the information released on sanctions cases. He said: “If you’re trying to organise an organisation like HMRC in terms of resourcing and all the rest of it, you would think that they might know how many investigations they have ongoing and how to staff all of those. So I’m surprised that they didn’t have that number to hand.”
HMRC also said it would protect the privacy of companies fined for breaking sanctions rules. The FOI response continued: “HMRC do not consider that disclosing the company name would drive compliance, promote voluntary disclosure or be proportionate.”
This is in stark contrast to other countries, notably the US, where companies are routinely named and shamed in an effort to drive compliance.
Enforcement
Leigh Hansson, partner at legal firm Reed Smith and a sanctions expert, said: “The US loves to name and shame, and I think from a US compliance perspective, it’s actually done quite a lot in further enforcing compliance both within the United States and globally.
“Because once you see a company [has] been fined or they’re placed on the specially-designated nationals list, all the other companies in their industry call around going: ‘hey, am I next?’
“And they want to know what it is that the company did – how did they violate sanctions?”
“One of the things the United States does in these penalty announcements is they provide background on the things the company did wrong, but these are also the things the company did right… And the information that they publish is quite helpful.”
The absence of such disclosure in the UK means both businesses and the public more widely have less clarity on the rules – which in turn may help explain why the regime has been more leaky than expected, with goods still flowing towards Russian satellite states, despite the fact that sanctions prohibit even indirect flows of goods to Russia.
Mr Handley said one consequence of the secrecy from HMRC is that “you’re operating in a vacuum, at the moment. Because the government’s not giving you the information that tells you what kind of conduct gets you to a civil settlement as opposed to a criminal prosecution”.
“So, again, even if you’re keeping the name anonymous, you can help businesses and individuals behave better and properly by giving more information,” he added.
World
Trump criticises Putin after potentially ‘historic’ meeting with Zelenskyy before Pope’s funeral
Donald Trump has criticised Vladimir Putin and suggested a shift in his stance towards the Russian president after a meeting with Volodymyr Zelenskyy before the Pope’s funeral.
The Ukrainian president said the one-on-one talks could prove to be “historic” after pictures showed him sitting opposite Mr Trump, around two feet apart, in the large marble hall inside St Peter’s Basilica.
The US president said he doubted his Russian counterpart’s willingness to end the war after leaving Rome after the funeral of Pope Francis at the Vatican.
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In a post on his Truth Social platform, he said “there was no reason” for the Russian president “to be shooting missiles into civilian areas, cities and towns, over the last few days”.
The two leaders held talks before attending the Pope’s funeral
He added: “It makes me think that maybe he doesn’t want to stop the war, he’s just tapping me along, and has to be dealt with differently, through ‘Banking’ or ‘Secondary Sanctions?’ Too many people are dying!!!”
The meeting between the US and Ukrainian leaders was their first face-to-face encounter since a very public row in the Oval Office in February.
Mr Zelenskyy said he had a good meeting with Mr Trump in which they talked about the defence of the Ukrainian people, a full and unconditional ceasefire, and a durable and lasting peace that would prevent the war restarting.
Other images released by the Ukrainian president’s office show Sir Keir Starmer and French President Emmanuel Macron were present for part of the talks, which were described as “positive” by the French presidency.
Mr Zelenskyy‘s spokesman said the meeting lasted for around 15 minutes and he and Mr Trump had agreed to hold further discussions later on Saturday.
The world leaders shared a moment before the service
Donald Trump and Volodymyr Zelenskyy meet in the Basilica
But the US president left Rome for Washington on Air Force One soon after the funeral without any other talks having taken place.
The Ukrainian president’s office said there was no second meeting in Rome because of the tight schedule of both leaders, although he had separate discussions with Mr Starmer and Mr Macron.
The French president said in a post on X “Ukraine is ready for an unconditional ceasefire” and that a so-called coalition of the willing, led by the UK and France, would continue working to achieve a lasting peace.
There was applause from some of the other world leaders in attendance at the Vatican when Mr Zelenskyy walked out of St Peter’s Basilica after stopping in front of the pontiff’s coffin to pay his respects.
Donald Trump and the Ukrainian president met for the first time since their Oval Office row. Pic: Reuters
Sir Tony Brenton, the former British ambassador to Russia, said the event presents diplomatic opportunities, including the “biggest possible meeting” between Mr Trump and the Ukrainian leader.
He told Sky News it could mark “an important step” in starting the peace process between Russia and Ukraine.
Professor Father Francesco Giordano told Sky News the meeting is being called “Pope Francis’s miracle” by members of the clergy, adding: “There’s so many things that happened today – it was just overwhelming.”
The bilateral meeting comes after Mr Trump’s peace negotiator Steve Witkoff held talks with Mr Putin at the Kremlin.
They discussed “the possibility of resuming direct negotiations between Russia and Ukraine”, Kremlin aide Yuri Ushakov said.
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Russia and Ukraine have not held direct talks since the early weeks of the war, which began in February 2022.
Mr Trump has claimed a deal to end the war is “very close” and has urged Mr Zelenskyy to “get it done” in a post on his Truth Social platform.
He has previously warned both sides his administration would walk away from its efforts to achieve a peace if the two sides do not agree a deal soon.
Meanwhile, the Polish armed forces said a Russian military helicopter violated its airspace over the Baltic Sea on Friday evening.
“The nature of the incident indicates that Russia is testing the readiness of our air defence systems,” they said in a post on X.
On an extraordinary day, remarkable pictures on the margins that capture what may be a turning point for the world.
In a corner of St Peter’s Basilica before the funeral of Pope Francis, the leaders of America and Ukraine sit facing each other in two solitary chairs.
They look like confessor and sinner except we cannot tell which one is which.
Leaning forward hands together in their laps, Donald Trump and Volodymyr Zelenskyy stare at each other in one photo.
In another, the Ukrainian president seems to be remonstrating with the US president. This is their first encounter since their infamous bust-up in the Oval Office.
The two leaders held talks before attending the Pope’s funeral
Other pictures show the moment their French and British counterparts introduced the two men. There is a palpable sense of nervousness in the way the leaders engage.
We do not know what the two presidents said in their brief meeting.
But in the mind of the Ukrainian leader will be the knowledge President Trump has this week said America will reward Russia for its unprovoked brutal invasion of his country, under any peace deal.
Mr Trump has presented Ukraine and Russia with a proposal and ultimatum so one-sided it could have been written in the Kremlin.
Kyiv must surrender the land Russia has taken by force, Crimea forever, the rest at least for now. And it must submit to an act of extortion, a proposed deal that would hand over half its mineral wealth effectively to America.
The world leaders shared a moment before the service
Afterwards, Zelenskyy said it had been a good meeting that could turn out to be historic “if we reach results together”.
They had talked, he said, about the defence of Ukraine, a full and unconditional ceasefire and a durable and lasting peace that will prevent a war restarting.
The Trump peace proposal includes only unspecified security guarantees for Ukraine from countries that do not include the US. It rules out any membership of Ukraine.
Ukraine’s allies are watching closely to see if Mr Trump will apply any pressure on Vladimir Putin, let alone punish him for recent bloody attacks on Ukraine.
Or will he simply walk away if the proposal fails, blaming Ukrainian intransigence, however outrageously, before moving onto a rapprochement with Moscow.
If he does, America’s role as guarantor of international security will be seen effectively as over.
This could be the week we see the world order as we have known it since the end of the Second World War buried, as well as a pope.
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