Research published today by Transparency International Russia in Exile identified 29,000 trade transactions, worth $8 billion (£5.9 billion), facilitated by companies registered in the UK’s Overseas Territories since the full-scale invasion of Ukraine in 2022. This follows previous reports that companies registered in the Overseas Territories exported $134 million worth of goods to Russia in 2024. 

As we mark the fourth anniversary of a deadly war, economic sanctions remain a central pillar of the international response, with the US, UK and EU imposing wide-ranging measures designed to restrict Russia’s access to global markets and choke off revenue for its war effort. 

Yet the findings suggest those efforts are being undermined. Russian businesses appear to have used 145 opaque offshore companies in Britain’s Overseas Territories to shield their activities, circumvent restrictions and continue buying and selling goods – helping to sustain the Russian economy despite international sanctions. 

Though the data indicates that offshore trade with Russia has been decreasing since the invasion, businesses registered in Bermuda and the British Virgin Islands (BVI) remain significant trade intermediaries, and so despite sweeping sanctions. It should also be noted that TI-Russia’s analysis is based on a sample of trade data, making it difficult to understand overall trends and the scale of the problem.  

Skirting sanctions?  

Our Russian colleagues found that Russia exported thousands of commodities subject to UK sanctions, including coal, steel, lead, iron and zinc. In theory UK sanctions prevent UK businesses engaging in these trades unless they are granted a special permission to do so. 

Although the Overseas Territories are governed independently, most have transposed the UK sanctions regime into their domestic laws. This means the same restrictions should apply: companies and individuals in these jurisdictions should be barred from importing restricted metals and exporting prohibited goods – including certain luxury items – to Russia. 

Yet the data suggests this trade has continued. In many cases, the goods were routed through opaque companies registered in Britain’s offshore financial centres, before reaching destinations such as China, Turkey or Germany. Other countries of destination found in the data include Egypt, Israel, and Iraq.  

Even where goods do not physically pass through the territories, using companies registered there as intermediaries may still constitute a sanctions breach unless a licence has been granted. 

Whether these transactions were lawful remains unclear. In the UK, licences authorising otherwise restricted activity are issued by the Office of Financial Sanctions Implementation (OFSI). In the Overseas Territories, however, each jurisdiction administers its own licensing regime. Public reporting on licences is extremely limited. In the British Virgin Islands, available disclosures suggest licences are most commonly granted for professional legal fees and expenses – offering little insight into whether broader trade authorisations have been issued. Some transactions might have also taken place before relevant sanctions were in place. 

This lack of transparency makes it difficult to assess whether the transactions were properly authorised or potentially in breach of sanctions. 

However, Russian investigative journalists claim some of these trades include shipments of coal connected to the ousted Ukrainian President Viktor Yanukovych, and a yachts bought by sanctioned businessmen who have gifted them onwards to senior public officials. 

In total, Transparency International Russia identified at least 160 yachts imported to Russia using companies registered in British Overseas Territories. This may violate UK sanctions, which prohibit the export of luxury goods, including yachts, to or for use in Russia.  

Offshore secrecy and transparency gaps  

At the heart of this problem lies corporate secrecy. Transparency International UK’s latest assessment of beneficial ownership registers in the Overseas Territories, found that most still do not provide accessible information on who really owns companies registered there. Without this basic transparency, it is extremely difficult to enforce sanctions effectively. 

Jurisdictions such as Bermuda, the Cayman Islands and particularly the BVI continue have long provided offshore shell companies with little visibility over their true owners. These opaque vehicles regularly appear in cases of corruption and money laundering. Combined with weak supervision of corporate service providers and other professional enablers – again, especially in the BVI - they create fertile ground for those seeking to sidestep sanctions out of sight.  

Despite repeated commitments to improve transparency, progress has stalled. Overseas Territories most recently committed to implementing registers of beneficial ownership accessible on the basis of “legitimate interest” by June 2025. Yet both the BVI and Bermuda have missed this deadline, with little clarity on when meaningful access will be in place. That companies registered in UK offshore territories may be facilitating the trade of restricted goods clearly makes the case about the importance of making this data available to journalists, civil society and researchers.   

The Cayman Islands have technically introduced a legitimate interest framework, but practical and procedural hurdles make the information difficult to obtain. In reality, it remains extremely challenging to identify who stands behind many of these companies. Gibraltar, by contrast, has made its register fully public, removed fees and simplified access – which shows that transparency is both possible and achievable despite privacy considerations.  

What needs to change 

Sanctions enforcement is a critical part of the UK’s response to Russia’s full-scale invasion of Ukraine, and the threats this pose to regional and international security. If the UK is serious about ensuring its sanctions regime has teeth, it cannot afford to leave these transparency gaps unaddressed.  

As the UK prepares to host an international summit on illicit finance, it should:  

  • Continue to require that Overseas Territories introduce meaningful and open access to beneficial ownership data. The identity of those accessing the data should be protected, and at no point should beneficial owners be notified or informed that their data is being accessed.  
  • The UK’s Office for Sanctions Implementation and Office for Trade Sanctions implementation should work closely with counterparts in Britain’s Overseas Territories to improve sanctions compliance and enforcement. 
  • Regulators in Britain’s Overseas Territories should issue guidance to company service providers administering companies involved in international trade to high-risk jurisdictions. 

Four years into the war the evidence is clear: Britain’s Overseas Territories are still a weak link in the international sanctions regime. Without greater transparency and stronger enforcement, the UK risks undermining its own foreign policy objectives and allowing its offshore jurisdictions being used as conduits for the kind of trade these sanctions were designed to prevent. 

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