The UK government is currently investigating 37 businesses with ties to the country for potentially violating sanctions on Russian oil, but so far, no fines have been imposed, the BBC has revealed. These sanctions were introduced by the UK and other Western nations in response to Russia’s invasion of Ukraine in 2022. They include a cap on the price of Russian oil, designed to limit Russia’s revenue from oil sales while allowing the commodity to continue flowing globally. The Treasury has opened investigations into 52 companies connected to the UK suspected of breaching the $60-a-barrel price cap since December 2022, with 37 ongoing as of August.
However, critics have expressed concerns that enforcement is lagging, as no penalties have yet been handed out. Dame Harriett Baldwin, the Conservative shadow foreign office minister, argued that the sanctions were essential to weakening Russia’s war funding but acknowledged that more could be done to crack down on violations. The Treasury, which oversees enforcement through the Office of Financial Sanctions Implementation (OFSI), has stated that investigations take time due to their complexity but remains committed to action where appropriate. OFSI was bolstered by an additional £50 million in funding in March to enhance sanctions enforcement.
Yet, there is growing frustration from organizations like Global Witness, which has called the oil price cap a “paper tiger” due to the lack of penalties. Louis Wilson from Global Witness criticized the ease with which companies under investigation could avoid penalties through documentation, claiming that some businesses could simply obtain “voluntary promises” to escape accountability. The issue of enforcement has also sparked political debate, with critics arguing that Western nations, including the US, might be reluctant to impose stricter sanctions out of concern over rising oil prices. Meanwhile, Dame Harriett Baldwin urged the government to take stronger action when clear violations occur, stressing the importance of financial penalties for those responsible.
This scrutiny over Russia sanctions comes as the UK’s Treasury Select Committee continues its inquiry into the effectiveness of these measures. Despite progress in reducing Russia’s oil revenues, the sanctions’ full impact remains a topic of debate, with some suggesting that oil refining in third countries is being exploited to bypass the restrictions. While OFSI did issue its first Russia-related penalty in August, a relatively small fine against a concierge company, there remains pressure on the government to show a more robust response, particularly as the investigations into oil price cap breaches continue.
