In a significant move to bolster sanctions against Russia, the UK government is set to introduce much tougher export controls aimed at preventing British goods from being diverted to support Vladimir Putin's war effort in Ukraine. This follows revelations about a British firm exporting machinery to an Armenian company with ties to Russia's military operations.
Strengthening Export Licensing Laws
Under new plans to be unveiled on Wednesday, the government will empower authorities to require UK manufacturers to obtain a licence when exporting to countries suspected of acting as staging posts for goods ultimately destined for Russia. This initiative comes after business minister Chris Bryant ordered a review of a decision to allow the export of UK carbon fibre equipment, which can be used in producing military hardware like drones and missiles, to an Armenian firm linked to Russia's war machine.
Addressing Diversion Concerns
Currently, the UK government can only flag concerns to exporters if it believes goods might be passed on to Russia, but it lacks the power to stop such exports. The new system, to be detailed in a statutory instrument, will mandate that companies obtain a licence from the Office for Trade Sanctions Implementation if officials suspect diversion—where sanctioned goods are funneled to Russia via third-party countries. This could allow goods to be halted at the border before leaving the UK if no licence is secured.
Bryant emphasized that these measures are designed to debilitate the Russian economy and its military capacity in Ukraine, stating, "We're trying to be ahead of the curve because Putin has been successful at getting what he needs to prosper financially." He noted that had the controls been in place earlier, they would have been applied on dozens of occasions to prevent sanctions evasion.
Impact on Businesses and Enforcement
While the new regime may add compliance costs for businesses, Bryant defended the approach, remarking, "If they're profitable from making money out of the war in Ukraine, that is on them." The move follows pressure from MPs, including Liam Byrne, chair of the business select committee, who raised alarms about the planned exports. This crackdown aims to close gaps in export controls and ensure that UK firms do not inadvertently or intentionally undermine international sanctions against Russia.
