Russian companies have conducted $8 billion (£5.9 billion) in trade through Britain’s secretive island territories since the invasion of Ukraine, according to a report detailing transactions involving goods ranging from oil-drilling equipment to luxury yachts linked to Moscow’s political elite.
Trade Routes and Sanctions Concerns
The analysis, published on the fourth anniversary of Russia’s assault on Ukraine, raises questions about the enforcement of sanctions designed to pressure the Kremlin and the role played by British overseas territories in facilitating these transactions.
The report, written by the Russian office of Transparency International while in exile, uncovered trade deals involving over 150 luxury yachts, dozens of aircraft, and equipment intended for Russia’s oil sector.
Analysis of 29,000 transactions identified several key areas of trade:
- Yachts linked to allies of Vladimir Putin.
- Drilling kit for Kremlin-backed oil projects.
- Coal linked to Ukraine’s pro-Russian ex-president.
- A jet linked to the Chechen warlord Ramzan Kadyrov.
Researchers found that more than 95% of the trade was routed through four territories: the British Virgin Islands, Bermuda, the Cayman Islands, and Gibraltar.
Most transactions occurred immediately after international sanctions were imposed in 2022, though Transparency International also identified more recent deals extending up to January 2025.
Luxury Goods and Key Vessels
In 2022, 65 transactions were identified as relating to “yachts,” often utilizing offshore entities in transfers between Turkey and the Russian port of Sochi, across the Black Sea. This number increased to 97 yacht trades in 2023, including deliveries to parts of Crimea annexed by Russia.
The $100 million, 74-metre vessel Universe, featured in Cayman Islands trade data, has been previously linked to Dmitry Medvedev, the deputy chair of Russia’s security council and former president, who is sanctioned by the UK.
Another vessel, named the Marlin, was delivered to Russia via a Cayman Islands company in 2022. According to a report by the independent Russian media outlet Proekt, it was purchased by oligarch Suleyman Kerimov and then gifted to a senior figure within Vladimir Putin’s inner circle. Kerimov is also on the UK sanctions list.
A spokesperson for Cayman Finance stated that UK sanctions laws are applied and “immediately enforced” on the island, adding that over $9.7 billion (£7.2 billion) in Russian assets have been frozen as part of Operation Hektor, a joint effort with the UK government.
British Virgin Islands and Bermuda
Of the $8 billion in trade analyzed, $4.4 billion involved companies in the British Virgin Islands, whose government has faced warnings from the UK regarding delays in implementing a publicly available register of corporate ownership.
Companies linked to the family of sanctioned, pro-Russian former Ukrainian president Viktor Yanukovych reportedly sent coal mined in occupied Ukrainian territories to Turkey. Proceeds from these sales were allegedly routed to offshore accounts registered to a BVI company.
Transparency International noted that the BVIs were unique among the overseas territories in that most transactions involved exports from Russia, including the purchase of natural resources from Russian companies, potentially indicating an effort to conceal trade income.
A BVI spokesperson said the data “does not appear to refer to any actual sanctions breaches,” and that the BVI had frozen more than $400 million in Russian assets in 2022. The islands’ government has established a dedicated sanctions unit to implement and enforce UK sanctions locally.
Bermuda accounted for nearly $3 billion of the trade volume. Russian companies used Bermuda entities to pay for drilling equipment in the oil and gas industry, including gas turbines and piles destined for a division of the Sakhalin Energy group, which is building the Sakhalin-2 oil and gas pipeline. Shell pulled out of the Sakhalin project in 2022, and it is now majority-owned by Gazprom.
A Bermuda company also facilitated the $55 million sale of an Airbus RA-73417 aircraft by a Dubai-based company, which Russian journalists have reported was purchased by the family of sanctioned Chechen warlord Ramzan Kadyrov.
A Bermuda spokesperson stated the territory “continues to ensure robust compliance with the obligations under the sanctions framework” and engages proactively with entities to uphold the jurisdiction’s integrity. They added that they do not comment on individual cases but that Bermuda’s sanctions regimes contain specific exceptions and licensing grounds.
Transparency International concluded that illicit financial flows, tax evasion, and sanctions circumvention are frequently channeled through firms and intermediaries registered in unaccountable jurisdictions.
The UK government has called for overseas territories and crown dependencies to introduce fully accessible registers of beneficial ownership. However, the UK has been accused of yielding to the BVI government by allowing it to limit access to its new register.
Gibraltar stated it is a “leader in transparency” as the first overseas territory to establish a register of beneficial ownership, adding that transactions involving Gibraltar companies comprised less than 1% of the trade in the report.
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