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Russia sanctions-busting? Huge questions stay over UK automotive exports | Enterprise Information

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The extraordinary, unprecedented and largely unexplained flows of tens of millions of kilos of British luxurious vehicles into states neighbouring Russia continued in February, in line with new official knowledge.

Some £26m price of British vehicles have been exported to Azerbaijan in February, in line with knowledge from HM Income & Customs.

The numbers present that within the newest quarter this former Soviet state with growing financial system standing was the seventeenth largest vacation spot for UK vehicles, greater than long-established export markets reminiscent of Eire, Portugal and Qatar.

Azerbaijan’s ascent has coincided nearly to the month with the imposition of sanctions on the export of vehicles to Russia.

British vehicles are banned from being despatched into Russia, each as “twin use” items, which may very well be repurposed as weapons, and, for any vehicles over the worth of £42,000, below particular luxurious items restrictions.

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Nevertheless, whilst UK automotive exports to Russia plummeted to zero, they’ve risen sharply to states neighbouring Russia, together with Kazakhstan, Kyrgyzstan, Georgia and, most notably of all, Azerbaijan.

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Whereas it’s unattainable to show the place these shipments find yourself finally, there may be plentiful anecdotal proof that these international locations are getting used as conduits to smuggle banned items to Russia.

The most recent HMRC knowledge exhibits that within the three months to February, the common worth of the vehicles being despatched to Azerbaijan was over £115,000, making this small, comparatively poor financial system one of the crucial high-value luxurious automotive markets on this planet – alongside Switzerland, Luxembourg and Saudi Arabia.

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The overall worth of UK automotive exports to Azerbaijan within the two years for the reason that invasion of Ukraine and the imposition of sanctions is now £523m. That compares to £58m within the instantly previous two years.

Britain’s motor foyer group, the Society of Motor Producers and Merchants (SMMT), has insisted that this 800% improve will be defined by home components within the Azerbaijani financial system – and isn’t related with Russian sanctions.

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March: British-made luxurious vehicles nonetheless being purchased by wealthy Russians

Learn extra:
UK-made cars are getting into Russia despite sanctions
2,000% increase in car sales to Azerbaijan ‘has nothing to do with Russia’

An SMMT spokesperson mentioned: “UK carmakers adjust to all commerce sanctions and would condemn any get together placing that dedication in danger. Automotive exports from UK factories to Azerbaijan have grown since 2019 as a consequence of a number of components, together with important new mannequin launches, pent-up demand and a rising home urge for food for UK luxurious vehicles. Certainly, UN knowledge exhibits that simply two vehicles of any origin have been formally exported from Azerbaijan to Russia this 12 months.

“We’ve by no means dominated out the chance that third events would possibly exploit any vulnerabilities within the sanction regime, and producers do all the pieces of their energy to forestall this. Any UK-built automobile on sale in Russia discovered its approach there with out their authorisation. This can be a fast-moving world problem masking merchandise from a number of sectors in lots of international locations deploying sanctions, and tackling any vulnerabilities requires a coordinated, world response.”

Nevertheless, whereas United Nations (UN) knowledge suggests the amount of vehicles being formally exported to Russia stays low, that very same proof means that, removed from behaving like a traditional automotive market, Azerbaijan does appear to be funnelling vehicles off elsewhere into Central Asia.

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Opposite to the SMMT’s evaluation, which suggests the automotive exports will be defined by home components, automotive exports from Azerbaijan have risen by 4,800% for the reason that invasion of Russia, with a lot of the vehicles destined (in line with UN knowledge) for Kazakhstan, Kyrgyzstan, Georgia and the United Arab Emirates.

Based on UK authorities sources, these states are understood to be extensively used as conduits for items into Russia.

Vehicles will not be the one British items to have seen a big spike in exports to Central Asia and the Caucasus – so too have elements and equipment used to make weapons. In a go to to Kyrgyzstan this week, Overseas Secretary Lord Cameron admitted that Russia is utilizing central Asian international locations to sidestep sanctions and construct its “warfare machine”.



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