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.
Financial sanctions on Russia were introduced by the UK and other Western countries following the invasion of Ukraine in 2022.
Conservative shadow foreign office minister Dame Harriett Baldwin said sanctions were designed to “shut down the sources of finance for Russia’s war machine” and “bring this illegal invasion to an end sooner”.
The Treasury said it would take action where appropriate, but pointed to the complexity of the cases as a reason they take considerable time.
The sanctions include a cap on the price of Russian oil, designed to ensure that oil can keep flowing without Russia making large profits.
The cap prohibits British businesses from facilitating the transportation of Russian oil sold above $60 a barrel.
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.
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As of August, 37 of those investigations were live and 15 had concluded, but no fines had been handed out.
The identities of the businesses are unknown but it’s understood some are likely to be maritime insurance firms.
Dame Harriett told the BBC “there is probably more that could be done” by the government and the oil sector itself “because it does appear that UK importers are still bringing in oil that originated in Russia”.
The anti-corruption organisation Global Witness said it was “quite astonishing” that no fines have yet been handed out, and described the oil cap as “a sort of paper tiger” that is failing to crack down on rule breaking.
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Louis Wilson, the head of fossil fuel investigations at Global Witness, called for “bold action” to be taken against companies breaching sanctions.
He said if the UK government “prevents British businesses from enabling Putin’s profiteering, then I think you’ll start to see others following that lead”.
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).
OFSI received an extra £50m of funding in March to improve enforcement of the UK’s sanctions regime
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But Mr Wilson said companies under investigation find it “pretty easy to come by” a document that gets them out of trouble.
He described the documents as “basically promises, voluntary bits of paper” and said they can be easily obtained even if the company was involved in transporting oil sold above the price cap.
“What’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,” he said.
He claimed the US were reluctant to make the Western sanctions regimes harder “because they’re scared that if they do enforce the rules it will stop the Russian oil trade and that will send oil prices higher”.
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Dame Harriett said it was important that when OFSI “find deliberate wrongdoing they are exacting financial penalties”.
A spokesperson for the Treasury said it would take enforcement action “where appropriate” and it was “putting sanction breachers on notice”.
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.
The former chair of Parliament’s Treasury Select Committee launched an inquiry into the effectiveness of sanctions on Russia in February.
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Dame Harriett said she “received 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.”
But parliamentary committees are disbanded once an election is called and the findings of the Treasury committee inquiry were never published.
It’s understood no decision has yet been made as to whether the new Treasury Select Committee will recommence the work.
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OFSI issued its first Russia-related penalty last month, when it fined a concierge company £15,000 for having a sanctioned individual on its client list.
London-based firm Integral Concierge Services was found to have made or received 26 payments that involved a person whose assets have been frozen as part of the Russia sanctions.
Making Europe safe for democracy will take much more than just maintaining Nato country defence budgets at 2 per cent of GDP, according to the organisation’s outgoing secretary-general Jens Stoltenberg (“So far, we have called Putin’s bluff”, Lunch with FT, Life & Arts, October 5).
Probably. But wouldn’t it be possible to improve the organisation’s weapons, capabilities and troops if the national defence forces of each country were put under one command?
Maybe we could start with the Nordic countries. Why do they each have their national defence forces and not one common defence force? Are they afraid of a future conflict and possible war with each other?
Jan Erik Grindheim Professor, University of South-Eastern Norway; and Afflliate, Civita Think Tank (Oslo), Notodden, Norway
The renters’ rights bill, which passed its second reading in the House of Commons this week, is set to be the biggest change to the private rented sector in England for over 30 years with proposed changes to ban Section 21 evictions, the introduction of open-ended tenancies and new requirements for property standards and rent increases (Report, September 12).
Propertymark is the UK’s leading membership body for property agents. While we want to see improved standards, the government must fully understand the impact these changes will have, with agents left wondering how this legislation will help meet the much-needed demand for homes for people to rent.
Our monthly Housing Insight Report shows on average eight registrations for each available property with fewer new properties coming on to the market. The bill in its current form is highly likely to exacerbate this situation with more landlords withdrawing homes from the private rented sector, frequently moving them to short-term lets.
Tax is reducing the investment appetite of new and existing landlords with higher rates of stamp duty on buy-to-let properties and the withdrawal of tax relief on mortgage interest costs. Ministers must recognise the financial implications of this bill and the impact it has on the supply of homes to rent.
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Through the renters’ rights bill, the UK government must commit to reviewing all costs and taxes impacting on private landlords to ensure landlords continue in the market and more landlords can meet the demand for homes to rent.
Additionally, with no security of a rental term for a landlord beyond the proposed two months’ notice period and no long-term guarantee of rent, we would expect to see a significant number of landlords attracted to higher rents in the short-term letting market, which also offers them the advantage of being unregulated.
With landlords exiting the private rented sector, the result would be a reduction in the rental stock available for long-term tenants and increased rents. To help mitigate this, the government must also enact the registration of short-term rental property requirements, as passed in the Levelling-up and Regeneration Act 2023, alongside these reforms to level the playing field for landlords and the long-term rental market.
Timothy Douglas Head of Policy and Campaigns, Propertymark, Warwick, UK
Your report (October 4) that giving the Chagos Islands to Mauritius means the sun has finally set on the British empire reminds me of a comment by Krishna Menon, a defence minister in post-independence India. The British empire had reached its zenith on September 29, 1923 having acquired enormous amount of territories following the first world war. It then covered nearly 14mn square miles, 150 times the size of Great Britain. This was a quarter of the world’s land area with 460mn people, a fifth of the world’s population. George V, as King Emperor, could proudly claim that the sun never set on the British empire.
This prompted Menon, then based in London campaigning for India’s freedom, to mockingly say: “The sun never set on the empire because God doesn’t trust the British in the dark.” Now the sun has set on the empire the British will surely regain God’s trust.
Why are western — normally American, but in this case British — computer programmers so arrogant as to insist that the rest of the world conform to their organisation (“AI start-ups make money faster than software groups of the past”, Report, September 28)?
I wanted to buy a couple of books by the brilliant and eloquent theologian Father Timothy Radcliffe OP, soon to be Cardinal Radcliffe, an eminent eminence indeed. Bloomsbury publishes the books. Unfortunately, my address takes the form of 3-2-1-1111, Osaka 543-2100. It makes twisted sense in Japan where few of the higgledy-piggledy streets and lanes have names. However, Bloomsbury’s computer insists on rendering my address as 3211111 Osaka 5432100 without allowing any hyphens or even commas — which code I doubt even Bloomsbury’s computers would be able to fathom.
Postcodes in Japan are not as precise as in the UK, and the same code may cover several hundred urban metres. There are ways round, by writing Chōme (city district name), Banchi (block), Gō (house number) and apartment, preceded by the number for each, but this is clumsy, and Japan prefers Chōme etc with hyphens; and I do not know whether my credit card or bank would recognise the address thus rendered. I fear that Global Britain may be lost in foreign lanes where customs are different.
China has cracked down on businesses including real estate, technology and finance
“Now I think about it, I definitely chose the wrong industry.”
Xiao Chen*, who works in a private equity firm in China’s financial hub, Shanghai, says he is having a rough year.
For his first year in the job, he says he was paid almost 750,000 yuan ($106,200; £81,200). He was sure he would soon hit the million-yuan mark.
Three years on, he is earning half of what he made back then. His pay was frozen last year, and an annual bonus, which had been a big part of his income, vanished.
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The “glow” of the industry has worn off, he says. It had once made him “feel fancy”. Now, he is just a “finance rat”, as he and his peers are mockingly called online.
China’s once-thriving economy, which encouraged aspiration, is now sluggish. The country’s leader, Xi Jinping, has become wary of personal wealth and the challenges of widening inequality.
Crackdowns on billionaires and businesses, from real estate to technology to finance, have been accompanied by socialist-style messaging on enduring hardship and striving for China’s prosperity. Even celebrities have been told to show off less online.
Loyalty to the Communist Party and country, people are told, now trumps the personal ambition that had transformed Chinese society in the last few decades.
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Mr Chen’s swanky lifestyle has certainly felt the pinch from this U-turn. He traded a holiday in Europe for a cheaper option: South East Asia. And he says he “wouldn’t even think about” buying again from luxury brands like “Burberry or Louis Vuitton”.
But at least ordinary workers like him are less likely to find themselves in trouble with the law. Dozens of finance officials and banking bosses have been detained, including the former chairman of the Bank of China.
The industry is under pressure. While few companies have publicly admitted it, pay cuts in banking and investment firms are a hot topic on Chinese social media.
Posts about falling salaries have generated millions of views in recent months. And hashtags like “changing career from finance” and “quitting finance” have gained more than two million views on the popular social media platform Xiaohongshu.
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Some finance workers have been seeing their income shrink since the start of the pandemic but many see one viral social media post as a turning point.
In July 2022, a Xiaohongshu user sparked outrage after boasting about her 29-year-old husband’s 82,500-yuan monthly pay at top financial services company, China International Capital Corporation.
People were stunned by the huge gap between what a finance worker was getting paid and their own wages. The average monthly salary in the country’s richest city, Shanghai, was just over 12,000 yuan.
It reignited a debate about incomes in the industry that had been started by another salary-flaunting online user earlier that year.
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Those posts came just months after Xi called for “common prosperity” – a policy to narrow the growing wealth gap.
In August 2022, China’s finance ministry published new rules requiring firms to “optimise the internal income distribution and scientifically design the salary system”.
The following year, the country’s top corruption watchdog criticised the ideas of “finance elites” and the “only money matters” approach, making finance a clearer target for the country’s ongoing anti-corruption campaign.
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Shanghai is a financial hub and China’s richest city
The changes came in a sweeping but discreet way, according to Alex*, a manager at a state-controlled bank in China’s capital, Beijing.
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“You would not see the order put into written words – even if there is [an official] document it’s certainly not for people on our level to see. But everyone knows there is a cap on it [salaries] now. We just don’t know how much the cap is.”
Alex says employers are also struggling to deal with the pace of the crackdown: “In many banks, the orders could change unexpectedly fast.”
“They would issue the annual guidance in February, and by June or July, they would realise that the payment of salaries has exceeded the requirement. They then would come up with ways to set up performance goals to deduct people’s pay.”
Mr Chen says his workload has shrunk significantly as the number of companies launching shares on the stock market has fallen. Foreign investment has decreased in China, and domestic businesses have also turned cautious – because of the crackdowns and weak consumption.
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In the past his work often involved new projects that would bring money into his firm. Now his days are mostly filled with chores like organising the data from his previous projects.
“The morale of the team has been very low, the discussion behind the bosses backs are mostly negative. People are talking what to do in three to five years.”
It’s hard to estimate if people are leaving the industry in large numbers, although there have been some layoffs. Jobs are also scarce in China now, so even a lower-paying finance job is still worth keeping.
But the frustration is evident. A user on Xiaohongshu compared switching jobs to changing seats – except, he wrote, “if you stand up you might find your seat is gone.”
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Mr Chen says that it’s not just the authorities that have fallen out of love with finance workers, it’s Chinese society in general.
“We are no longer wanted even for a blind date. You would be told not to go once they hear you work in finance.”
*The names of the finance workers have been changed to protect their identities.
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