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.”
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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.
Volodymyr Zelenskyy has said Ukraine is “most interested in peace” and confirmed officials will hold talks with US partners in Saudi Arabia next week about ending the war with Russia.
It comes as Sir Keir Starmer is due to hold talks with European leaders on Friday about Ukraine.
The prime minister and French President Emmanuel Macron are seeking countries willing to supply troops for a peacekeeping force to defend a potential deal. The suggested agreement has already been rejected by Russia.
In his nightly address on Thursday, the Ukrainian president said his country was “most interested in peace”.
He also appeared to signal relations between the US and Ukraine were getting back on track after his disastrous White House visit – saying talks will take place in Saudi Arabia, but suggested he would not be part of those discussions.
The Ukrainian president said: “I am scheduled to visit Saudi Arabia to meet with the crown prince.
“After that, my team will stay in Saudi Arabia to work with American partners. Ukraine is most interested in peace.”
He added: “As we told President Trump, Ukraine is working and will work exclusively constructively for a quick and reliable peace.”
It comes around a week after the public row between the two men in the Oval Office. It has been followed this week by America freezing military aid to Ukraine.
Meanwhile, in an exchange with reporters on Thursday, the US president said his administration had made “a lot of progress” in recent days with both Ukraine and Russia, but did not specify further.
“I think what’s going to happen is Ukraine wants to make a deal, because I don’t think they have a choice,” Mr Trump said.
“I also think that Russia wants to make a deal because in a certain different way – a different way that only I know, only I know – they have no choice either.”
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President Donald Trump speaks at a joint session of Congress. Pic: Reuters
Earlier on Thursday, Steve Witkoff, a senior US official, praised a letter sent from Mr Zelenskyy to Mr Trump as a “positive first step” following their unsuccessful meeting.
“We are now in discussions to coordinate a meeting with the Ukrainians in Riyadh or even potentially Jeddah,” he said. “The city is moving around a little bit, but it will be Saudi Arabia.”
Mr Witkoff said Washington was trying to agree on a framework for a possible peace agreement in Ukraine.
It has also been pushing for the signing of a critical minerals deal with Ukraine – but it is unclear if that will be part of the talks next week.
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US-UK defence secretaries meet
Defence Secretary John Healey said Mr Trump has “asked Europe to step up, and we are” as he started talks in Washington with his US counterpart Pete Hegseth on Thursday.
Mr Hegseth said it was “very encouraging” to see France and the UK say they are prepared to take a leading role.
Sir Keir has been seeking to support Ukraine and show Mr Trump the UK is committed to stepping up its defence efforts – while mooting plans for a peacekeeping force.
Russian foreign minister Sergei Lavrov said the move would amount to the “direct, official and unveiled involvement of NATO members in the war against Russia”.
While Andrei Kelin, Russian ambassador to the UK, said in an interview with Sky News’ The World With Yalda Hakim, that Russia wanted “quick peace” in Ukraine and the UK was at the “head of those resisting” it.
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Russian ambassador speaks to Sky News
European leaders meanwhile backed new defence spending plans aimed at freeing billions for the continent’s security.
The 27 leaders signed off on a move to loosen budget restrictions so that willing EU countries can increase their spending.
On Thursday evening, Russia launched a mass drone attack on the Black Sea port of Odesa, damaging energy infrastructure and starting fires, according to a local governor.
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Russia wants ‘quick peace’ in Ukraine and London is ‘head of those resisting it’, ambassador to UK tells Sky News
Russia wants “quick peace” in Ukraine and London is at the “head of those resisting” it, the Russian ambassador to the UK has told Sky News.
In an interview on The World With Yalda Hakim, Andrei Kelin accused the UK, France and other European nations of not wanting to end the war in Ukraine.
“We are prepared to negotiate and to talk,” he said. “We have our position. If we can strike a negotiated settlement… we need a very serious approach to that and a very serious agreement about all of that – and about security in Europe.”
Russian ambassador Andrei Kelin speaks to Yalda Hakim
US President Donald Trump held a surprise phone call with his Russian counterpart Vladimir Putin last month, shocking America’s European allies. He went on to call Ukrainian President Volodymyr Zelenskyy a “dictator” and relations between the pair were left in tatters after a meeting in the Oval Office descended into a shouting match.
Days later, the US leader suspended military aid to Ukraine, though there were signs the relationship between the two leaders appeared to be on the mend following the contentious White House meeting last week, with Mr Trump saying he “appreciated” a letter from Mr Zelenskyy saying Kyiv was ready to sign a minerals agreement with Washington “at any time”.
In his interview with Sky News’ Yalda Hakim, Mr Kelin said he was “not surprised” the US has changed its position on Russia’s full-scale invasion of Ukraine, which began in 2022, claiming Mr Trump “knows the history of the conflict”.
“He knows history and is very different from European leaders,” he added.
No doubt Russia is welcoming shift in world order
I’ve interviewed the Russian ambassador to the UK, Andrei Kelin, on a number of occasions, at times the conversation has been tense and heated.
But today, I found a diplomat full of confidence and cautiously optimistic.
The optics of course have suddenly changed in Russia’s favour since Donald Trump was elected.
I asked him if Russia couldn’t believe its luck. “I would not exaggerate this too much,” he quipped.
Mr Kelin also “categorically” ruled out European troops on the ground and said the flurry of diplomatic activity and summits over the course of the past few weeks is not because Europeans want to talk to Moscow but because they want to present something to Mr Trump.
He appeared to relish the split the world is witnessing in transatlantic relations.
Of course the ambassador remained cagey about the conversations that have taken place between President Trump and Vladimir Putin.
There is no doubt however that Russia is welcoming what Mr Kelin says is a shift in the world order.
Peace deal ‘should recognise Russian advances’
The Russian ambassador said Moscow had told Washington it believed its territorial advances in Ukraine “should be recognised” as part of any peace deal.
“What we will need is a new Ukraine as a neutral, non-nuclear state,” he said. “The territorial situation should be recognised. These territories have been included in our constitution and we will continue to push that all forces of the Ukrainian government will leave these territories.”
Asked if he thought the Americans would agree to give occupied Ukrainian land to Russia, he said: “I don’t think we have discussed it seriously. [From] what I have read, the Americans actually understand the reality.”
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In full: Russian ambassador’s interview with Sky’s Yalda Hakim
Moscow rules out NATO peacekeepers in Ukraine
He said Russia “categorically ruled out” the prospect of NATO peacekeepers on the ground in Ukraine – a proposal made by UK Prime Minister Sir Keir Starmer and French President Emmanuel Macron – saying “they have no rules of engagement” and so would just be “sitting in cities”.
“It’s senseless” and “not for reality,” Mr Kelin added.
He branded the temporary ceasefire raised by Mr Zelenskyy “a crazy idea”, and said: “We will never accept it and they perfectly are aware of that.
“We will only accept the final version, when we are going to sign it. Until then things are very shaky.”
He added: “We’re trying to find a resolution on the battlefield, until the US administration suggest something constructive.”
World
US ‘destroying’ international rules-based order by trying to meet Russia ‘halfway’, Ukraine’s UK ambassador warns
The United States is “finally destroying” the international rules-based order by trying to meet Russia “halfway”, Ukraine’s ambassador to the UK has warned.
Valerii Zaluzhnyi said Washington’s recent actions in relation to Moscow could lead to the collapse of NATO – with Europe becoming Russian President Vladimir Putin‘s next target.
“The failure to qualify actions of Russia as an aggression is a huge challenge for the entire world and Europe, in particular,” he told a conference at the Chatham House think tank.
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“We see that it is not just the axis of evil and Russia trying to revise the world order, but the US is finally destroying this order.”
Valerii Zaluzhnyi. Pic: Reuters
Mr Zaluzhnyi, who took over as Kyiv’s ambassador to London in 2024 following three years as commander-in-chief of the Ukrainian armed forces, also warned that the White House had “questioned the unity of the whole Western world” – suggesting NATO could cease to exist as a result.
It comes as Ukrainian President Volodymyr Zelenskyy scrambles to repair relations with US President Donald Trump following a dramatic row between the two men in the Oval Office last week.
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Mr Trump signalled on Tuesday that tensions could be easing, telling Congress he had received a letter from Mr Zelenskyy saying he was ready to sign a peace deal “at any time”.
Zelenskyy and Trump during their extraordinary Oval Office row. Pic: Reuters
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But on the same day, the US president ordered a sudden freeze on shipments of US military aid to Ukraine, and Washington has since paused intelligence sharing with Kyiv and halted cyber operations against Russia.
Keep up with all the latest news from the UK and around the world by following Sky News
Mr Zaluzhnyi said the pause in cyber operations and an earlier decision by the US to oppose a UN resolution condemning Russian aggression in Ukraine were “a huge challenge for the entire world”.
He added that talks between the US and Russia – “headed by a war criminal” – showed the White House “makes steps towards the Kremlin, trying to meet them halfway”, warning Moscow’s next target “could be Europe”.
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