In a significant move to strengthen 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. The new measures, to be unveiled on Wednesday, will empower authorities to require licences for exports to countries suspected of acting as conduits for goods ultimately destined for Russia.
Background and Government Review
This development follows a Guardian report that highlighted a controversial decision to allow a British firm to export carbon fibre equipment to an Armenian company with links to Russia's military operations. Business minister Chris Bryant ordered a review of this case after concerns were raised by Liam Byrne MP, chair of the business select committee, regarding the potential use of such machinery in producing military hardware like drones and missiles.
Enhanced Licensing Regime
Under the current system, the UK government can express concerns to exporters about possible diversion but lacks the power to halt shipments. The new statutory instrument will change this by mandating that companies obtain a licence from the Office for Trade Sanctions Implementation if officials suspect any risk of goods being funnelled to Russia via third-party countries. This means goods could be stopped at the border if no licence is secured, a measure Bryant described as "much tougher than what we have at the moment."
Motivation and Impact
Bryant emphasised that the government is driven by worries that sanctions are being undermined by diversion, often unintentional on the part of exporters but deliberate by the Russian state. He stated, "We're trying to be ahead of the curve because Putin has been successful at getting what he needs to prosper financially." The goal is to debilitate the Russian economy and, by extension, its military capacity in Ukraine. Had these controls been in place earlier, Bryant noted they would have been applied on "dozens" of occasions.
Business Implications
When questioned about potential added costs for businesses, Bryant responded bluntly, "If they're profitable from making money out of the war in Ukraine, that is on them." This underscores the government's firm stance on prioritising sanctions enforcement over commercial interests, aiming to close loopholes that allow goods to reach Russia indirectly.
The announcement reflects ongoing efforts to bolster international trade restrictions and support Ukraine amidst the conflict, with a focus on tightening regulatory frameworks to prevent exploitation of global supply chains.
