British firms’ exports are almost certainly bolstering Russia’s war machine in Ukraine, Sky data analysis finds
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.”
World
Trump ‘thinking’ of going to Turkey for proposed Zelenskyy-Putin talks – as Russia silent on attending
Donald Trump has said he is “thinking” of going to Turkey on Thursday for potential peace talks between Ukraine and Russia’s leaders.
The US president, who previously claimed he could end the conflict in a day, has pushed for both sides to meet to bring the fighting to an end.
On Sunday, Ukraine’s Volodymyr Zelenskyy called out Vladimir Putin to meet him on Thursday in Istanbul, but the Kremlin leader has yet to respond.
Speaking late on Monday, Mr Trump said: “I was thinking about flying over. I don’t know where I am going be on Thursday.
“I’ve got so many meetings.
“There’s a possibility there I guess, if I think things can happen.”
Mr Trump has headed to the Middle East this week on the first major foreign trip of his second administration, visiting Saudi Arabia, Qatar and the UAE.
Mr Zelenskyy backed the prospect of Mr Trump attending the talks.
He said: “I supported President Trump with the idea of direct talks with Putin. I have openly expressed my readiness to meet.
“And of course, all of us in Ukraine would appreciate it if President Trump could be there with us at this meeting in Turkey.”
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Trump 100: Could Putin, Zelenskyy and Trump really meet?
Russia playing for time?
However, Kremlin spokesperson Dmitry Peskov, speaking on Monday, refused to say who, if anyone, would be travelling to Turkey from the Russian side.
“Overall, we’re determined to seriously look for ways to achieve a long-term peaceful settlement. That is all,” Mr Peskov said.
This came after the “coalition of the willing”, including Sir Keir Starmer, threatened Russia with fresh sanctions if it failed to comply with an unconditional 30-day ceasefire starting on Monday.
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Russia effectively rejected this proposal, instead calling for direct negotiations in Istanbul with Ukraine, at which Mr Zelenskyy challenged Mr Putin to make the trip himself.
Despite Russia’s claims towards wanting peace, Ukraine’s allies remained deeply sceptical about prospects for talks and whether Mr Putin was serious.
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European Union commission vice president Kaja Kallas said: “We want to see that Russia also wants peace.
“It takes two to want peace, it takes only one to want war, and we see that Russia clearly wants war.”
Meanwhile, Russia continued its nightly attacks on Ukraine.
Overnight into Tuesday, Ukraine said Moscow launched more than 100 drones.
It has been an extraordinary few hours which may well set the tone for a hugely consequential week ahead.
In the time that it took me to fly from London to Saudi Arabia, where President Donald Trump will begin a pivotal Middle East tour this week, a flurry of news has emerged on a range of key global challenges.
• On the Gaza war: The Trump administration has confirmed it’s holding talks with Hamas, which says it will release a hostage amid renewed hopes of a ceasefire.
• On the Ukraine war: President Volodymyr Zelenskyy has said he is prepared to meet Russian President Vladimir Putin in Istanbul – this announcement came minutes after Trump urged Zelenskyy to agree to the meeting.
• On the China-US trade war: The White House says the two countries have agreed to a “trade deal”. China said the talks, in Geneva, were “candid, in-depth and constructive”.
All three of these developments represent dramatic shifts in three separate challenges and hint at the remarkable influence the US president is having globally.
This sets the ground for what could be a truly consequential week for Trump’s presidency and his ability to effect change.
With his unique style, Trump is seeking to align numerous stars as he embarks on his first foreign diplomatic trip of his second presidency.
For days, it’s been unclear how the week ahead would unfold and which global challenge would be dominant.
The Saudi government has been instrumental as a broker in the Ukraine-Russia conflict and Qatar has been a mediator in the Gaza war.
Trump will visit both countries this week.
President Donald Trump on Air Force One earlier this month. File pic: AP
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Putin under pressure?
On Ukraine, Putin held a late-night news conference at the Kremlin on Saturday at which he made the surprise proposal of talks with Zelenskyy in Istanbul this Thursday.
But he rejected European and US calls for an immediate ceasefire.
The move was widely interpreted as a delay tactic.
Trump then issued a social media post urging Zelenskyy to accept the Russian proposal; effectively to call Putin’s bluff.
The American president wrote: “President Putin of Russia doesn’t want to have a Cease Fire Agreement with Ukraine, but rather wants to meet on Thursday, in Turkey, to negotiate a possible end to the BLOODBATH. Ukraine should agree to this, IMMEDIATELY. At least they will be able to determine whether or not a deal is possible, and if it is not, European leaders, and the U.S., will know where everything stands, and can proceed accordingly! I’m starting to doubt that Ukraine will make a deal with Putin, who’s too busy celebrating the Victory of World War ll, which could not have been won (not even close!) without the United States of America. HAVE THE MEETING, NOW!!!”
Within minutes, Zelenskyy responded, agreeing to the talks.
“We await a full and lasting ceasefire, starting from tomorrow, to provide the necessary basis for diplomacy. There is no point in prolonging the killings. And I will be waiting for Putin in Türkiye on Thursday. Personally. I hope that this time the Russians will not look for excuses,” Zelenskyy wrote on X.
The prospect of Putin and Zelenskyy together in Istanbul on Thursday is remarkable.
It raises the possibility that Trump would want to be there too.
President Volodymyr Zelenskyy welcomes other world leaders to Kyiv. Pic: Presidential Office of Ukraine/dpa/AP Images
Israel’s war in Gaza
On Gaza, it’s been announced that US envoy Steve Witkoff will arrive in Israel on Monday to finalise details for the release of Idan Alexander, an Israeli-American hostage being held by Hamas.
The development comes after it was confirmed that Mr Witkoff has been holding discussions with Israel, Qatar and Egypt and, through them, with Hamas.
The talks focused on a possible Gaza hostage deal and larger peace discussions for a ceasefire.
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Gaza after around a year and a half of Israeli attacks. Pic: Reuters/Mahmoud Issa
Just days ago, Israel announced a new military plan to move back into Gaza.
When do candid talks become a trade deal?
Meanwhile, officials from the United States and China have been holding talks in Geneva, Switzerland, to resolve their trade war, which was instigated by Trump’s tariffs against China.
Late on Sunday evening, the White House released a statement claiming that a trade deal had been struck.
In a written statement, titled “U.S. Announces China Trade Deal in Geneva”, treasury secretary Scott Bessent said: “I’m happy to report that we made substantial progress between the United States and China in the very important trade talks… We will be giving details tomorrow, but I can tell you that the talks were productive. We had the vice premier, two vice ministers, who were integrally involved, Ambassador Jamieson, and myself. And I spoke to President Trump, as did Ambassador Jamieson, last night, and he is fully informed of what is going on. So, there will be a complete briefing tomorrow morning.”
Beijing Global Times newspaper quoted the Chinese vice premier as saying that the talks were candid, in-depth and constructive.
However, the Chinese fell short of calling it a trade deal.
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A Qatari gift
In a separate development, US media reports say that Qatar is preparing to gift Trump a Boeing 747 from its royal fleet, which he would use as a replacement for the existing and aging Air Force One plane.
The Qatari government says no deal has been finalised, but the development is already causing controversy because of the optics of accepting gifts of this value.
Of all the fronts in Donald Trump’s trade war, none was as dramatic and economically threatening as the sky-high tariffs he imposed on China.
There are a couple of reasons: first, because China is and was the single biggest importer of goods into the US and, second, because of the sheer height of the tariffs imposed by the White House in recent months.
In short, tariffs of over 100% were tantamount to a total embargo on goods coming from the United States’ main trading partner. That would have had enormous economic implications, not just for the US but every other country around the world (these are the world’s biggest and second-biggest economies, after all).
Trump latest: US and China slash tariffs in trade war de-escalation
So the truce announced on Monday by treasury secretary Scott Bessent is undoubtedly a very big deal indeed.
In short, China will still face an extra 30% tariffs (the 20% levies cast as punishment for China’s involvement in fentanyl imports and the 10% “floor” set on “Liberation Day”) on top of the residual 10% average from the Biden era.
But the rest of the extra tariffs will be paused for 90 days. China, in turn, has suspended its own retaliatory tariffs on the US.
The market has responded as you would probably have expected, with share prices leaping in relief. But that raises a question: is the trade war now over? Now that the two sides have blinked, can globalisation continue more or less as it had before?
That, it turns out, is a trickier and more complex question than it might first seem.
Pic: AP
For one thing, even if one were to assume this is a permanent truce rather than a suspended one, it still leaves tariffs considerably higher than they were only last year. And China faces tariffs far higher than most other countries (tot up the existing ones and the Trump era ones and China faces average tariffs of around 40%, while the average for most countries is between 8% and 14%, according to Capital Economics).
In other words, the US is still implementing an economic policy designed to increase the cost of doing business with China, even if it no longer attempts to prevent it altogether. The fact that last week’s trade agreement with the UK contains clauses seemingly designed to encourage it to raise trade barriers against China for reasons of “security” only reinforces this suspicion. The trade war is still simmering, even if it’s no longer as hot as it was a few days ago.
Read more:
US-UK trade deal ‘isn’t worth the paper it’s written on’
Key details in ‘historic’ US-UK trade deal
And more broadly, the deeper impact of the trade rollercoaster in recent months is unlikely to disappear altogether. Companies remain more nervous about investing in factories and expansions in the face of such deep economic instability. No-one is entirely sure the White House won’t just U-turn once again.
That being said, it’s hard not to escape the conclusion that the US president has blinked in this trade war. In the face of a potential recession, he has pulled back from the scariest and most damaging of his tariffs, earlier and to a greater extent than many had expected.
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