The absence of open records of owners complicate endeavors to ascertain who is responsible for the trade with Russia. Enterprises registered in the UK overseas territories exported more than $134 million worth of commodities to the Russian Federation in 2024 by evading UK sanctions. The UK sanctions legislation against Russia is supposed to prevent individuals and companies from exporting dual-use, military, and luxury goods to Russia for the purpose of denying access of the war machine of the Kremlin to various technology and exerting pressure on the Russian economy.
Notwithstanding this circumstance, the absence of open records of owners in the UK overseas territories makes it almost impossible to establish who is responsible for such shipments. Russian documents imply that entities of the British Virgin Islands are responsible for exporting a large volume of products to Russia. Rise International Group shipped more than $119 million of electronics, giving its address as that of a fiduciary business of the British Virgin Islands. However, it is impossible to ascertain the officers and owners of the company, doing a lot of trade with the PRC.
The case of Rise International Group is typical of the way how companies of the overseas territories ship products. The Russian paperwork lists the entity as the exporter of the products, giving an address in the capital of the British Virgin Islands. However, these products were transported from the PRC to Russia.
The policy of the UK has some weaknesses, which prevent the UK from thwarting the supply system of critical technology of Russia. A significant number of firms registered in the British Virgin Islands have been accused of using various schemes for money laundering. The UK needs public registers to follow the finances for the purpose of identifying potential crimes. These registers are vital for the purpose of identifying and putting an end to the flow of finances, harming the economy of the UK and its partners.
Although the parliament of the UK decided to make the records of owners public in 2018 and gave the British Virgin Islands and the Cayman Islands a deadline of December 2023, they failed to stick to it. Furthermore, some UK records miss significant data or show rounded numbers for weight and prices of products. For instance, one company from the Russian Federation shipped drying fluid and jet fuel to the United Kingdom in 2022, and all these products cost $15 million and weighed 15 million kg.
All these circumstances demonstrate that the Russian Federation still manages to circumvent sanctions imposed on it by the UK. That is why the UK should establish total control over exporting activities of the British Overseas Territories and check any suspicious trade with other countries.
