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The government is investigating 37 UK-linked businesses for potentially breaking Russian oil sanctions – but no fines have been handed out so far, the BBC can reveal.<\/p>\n
Financial sanctions on Russia were introduced by the UK and other Western countries following the invasion of Ukraine in 2022.<\/p>\n
Conservative shadow foreign office minister Dame Harriett Baldwin said sanctions were designed to \u201cshut down the sources of finance for Russia’s war machine\u201d and \u201cbring this illegal invasion to an end sooner\u201d.<\/p>\n
But critics have claimed they are ineffective after the latest figures showed the Russian economy was growing<\/a>.<\/p>\n<\/div>\n The Treasury said it would take action where appropriate, but pointed to the complexity of the cases as a reason they take considerable time.<\/p>\n The sanctions include a cap on the price of Russian oil, designed to ensure that oil can keep flowing without Russia making large profits.<\/p>\n The cap prohibits British businesses from facilitating the transportation of Russian oil sold above $60 a barrel.<\/p>\n Data obtained by the BBC using Freedom of Information laws shows the Treasury has opened investigations into 52 companies with a connection to the UK suspected of breaching the price cap since December 2022.<\/p>\n As of August, 37 of those investigations were live and 15 had concluded, but no fines had been handed out. <\/p>\n The identities of the businesses are unknown but it\u2019s understood some are likely to be maritime insurance firms.<\/p>\n Dame Harriett told the BBC \u201cthere is probably more that could be done\u201d by the government and the oil sector itself \u201cbecause it does appear that UK importers are still bringing in oil that originated in Russia\u201d.<\/p>\n The anti-corruption organisation Global Witness said it was \u201cquite astonishing\u201d that no fines have yet been handed out, and described the oil cap as \u201ca sort of paper tiger\u201d that is failing to crack down on rule breaking.<\/p>\n Louis Wilson, the head of fossil fuel investigations at Global Witness, called for \u201cbold action\u201d to be taken against companies breaching sanctions.<\/p>\n He said if the UK government \u201cprevents British businesses from enabling Putin’s profiteering, then I think you’ll start to see others following that lead\u201d.<\/p>\n<\/div>\n Investigations into potential breaches of the oil cap and other financial sanctions are carried out by a Treasury unit called the Office of Financial Sanctions Implementation (OFSI).<\/p>\n OFSI received an extra \u00a350m of funding in March to improve enforcement of the UK\u2019s sanctions regime<\/p>\n But Mr Wilson said companies under investigation find it \u201cpretty easy to come by\u201d a document that gets them out of trouble.<\/p>\n He described the documents as \u201cbasically promises, voluntary bits of paper\u201d and said they can be easily obtained even if the company was involved in transporting oil sold above the price cap.<\/p>\n \u201cWhat’s likely is either these businesses will find the paperwork that they need to get through this process, or we’ll see the UK government drop these cases quietly,\u201d he said.<\/p>\n He claimed the US were reluctant to make the Western sanctions regimes harder \u201cbecause they’re scared that if they do enforce the rules it will stop the Russian oil trade and that will send oil prices higher\u201d.<\/p>\n Dame Harriett said it was important that when OFSI \u201cfind deliberate wrongdoing they are exacting financial penalties\u201d.<\/p>\n A spokesperson for the Treasury said it would take enforcement action “where appropriate” and it was “putting sanction breachers on notice”.<\/p>\n They added that the cap was reducing Russia’s tax revenues from oil, adding that data from the country’s own finance ministry showed a 30% drop last year compared to 2022.<\/p>\n The former chair of Parliament\u2019s Treasury Select Committee launched an inquiry into the effectiveness of sanctions on Russia in February.<\/p>\n Dame Harriett said she \u201creceived evidence that the oil price cap is being evaded by refining Russian oil in refineries based in third countries and then the oil is being exported into the UK.\u201d<\/p>\n