UK companies selling to the declared ‘enemy’ is nothing new

The revelations that the UK luxury car market continues to trade with Russia, whom we are told is our current ‘enemy’, should not be a surprise. UK companies were selling parts for weapons to the Nazis.

Despite the sanctions imposed on Russia following the invasion of Ukraine, British carmakers seem to have found alternative routes to continue selling luxury vehicles to Russia, circumventing the direct export ban. An analysis suggests that these luxury cars are being exported indirectly to Russia through former Soviet states, particularly Azerbaijan.

Official HMRC trade data reveals that while direct British car exports to Russia have dropped to zero post the 2022 invasion of Ukraine, there has been a significant surge in car exports to neighboring countries, notably Azerbaijan. The UK exported £273 million worth of vehicles to Azerbaijan in the past year, marking a staggering 1,860% increase compared to the five years preceding the invasion.

This surge in exports to Azerbaijan mirrors the annual car exports to Russia before sanctions were imposed, which averaged £330 million. This has been cross-referenced the UK HMRC statistics with UN international trade data, demonstrating a corresponding increase in car exports from Azerbaijan to Russia during the same period.

Sources suggest that Russian buyers, particularly those seeking British cars, prefer using Azerbaijan as a route. However, British carmakers insist that they are no longer selling cars to Russia. The HMRC data, while showing the increase in exports, does not provide proof that the cars ultimately reached Russia, as tracking individual consignments becomes challenging once they leave port, especially when arriving in a third country.

The UK government is concerned about this grey area, where goods might be sent to Russia via former Soviet satellite states in the Caucasus and Central Asia. Luxury cars, valued at over £42,000, are explicitly banned from being sold to Russia under the “dual use” sanctions regime.

The average value of UK cars exported to Azerbaijan was more than £100,000, indicating that these consignments primarily or exclusively consist of luxury cars. The Society of Motor Manufacturers and Traders (SMMT) states that UK vehicle manufacturers are committed to complying with trade sanctions, though challenges in tracking consignments once they enter third countries remain.

Sanctions experts highlight the difficulty in combating the flow of goods to Russia through third countries, such as Azerbaijan. The Centre for Financial Crime & Security Studies emphasises the close economic ties between Azerbaijan, Armenia, and Russia, making it challenging to track goods once within this common economic area.

Rolls-Royce and Bentley, two prominent British car manufacturers, assert that they ceased production and supply to the Russian market before international trade sanctions were imposed. They emphasise compliance with sanctions and regulations, while emphasising the responsibility of their global dealer network to follow all applicable laws.

The HMRC data does not identify specific carmakers or consignments but indicates that the Port of Bristol has become a significant hub for this trade. Exports from the Port of Bristol to Azerbaijan surged to over £100 million annually in the two years following the invasion. The overall rise in car exports to Azerbaijan has made it the UK car industry’s 16th largest export destination by value.

This development raises concerns, as other banned items, including those repurposed as weapons, have been sent to former Soviet states in the Caucasus and Central Asia, further highlighting the challenge of enforcing sanctions effectively. The UK’s sanctions minister, Anne-Marie Trevelyan, acknowledges the efforts of investigative journalists and NGOs in exposing circumvention attempts and reiterates the government’s commitment to imposing severe sanctions on Russia and its allies.

Nothing New

During World War II, some Western corporations engaged in business with Nazi Germany before hostilities escalated. Here are a few examples:

UK companies:

1. Standard Oil (UK): The British arm of Standard Oil, which was a subsidiary of the U.S.-based Standard Oil, continued to supply oil to Germany during the early years of the war. It’s worth noting that Standard Oil had diverse international interests, and the UK subsidiary operated independently.
2. Vickers Armstrong: This engineering and armaments company supplied ball bearings and other materials to Germany before the war began. Vickers Armstrong was one of the companies investigated during the post-war period.
3. ICI (Imperial Chemical Industries): ICI supplied chemicals to Germany, and there were allegations that some of its products were used in the German war effort. However, the extent and nature of ICI’s involvement have been subjects of debate among historians.
4. Austin Motor Company: The Austin Motor Company, known for manufacturing automobiles, supplied military vehicles to both the Allied and Axis forces. Before the war, the company exported cars to Germany, and during the war, it produced military vehicles for the British and other Allied armies.

Others:

1. IBM (International Business Machines): IBM is perhaps one of the most well-known examples. The company’s German subsidiary, Dehomag, provided punch-card machines and technology that the Nazis used for various purposes, including census data and the management of concentration camps.
2. Ford: Ford had a presence in Nazi Germany through its subsidiary, Ford-Werke AG. The German branch of Ford continued to operate under Nazi rule and produced military vehicles for the German army.
3. General Motors (GM): Opel, a subsidiary of General Motors, operated in Germany during the Nazi era. Opel produced military trucks and other vehicles for the German military.
4. Standard Oil (Now ExxonMobil and Chevron): There were allegations that Standard Oil, owned by the Rockefeller family, provided oil and synthetic rubber to Nazi Germany. However, it’s worth noting that these allegations are controversial, and the extent of collaboration is still debated among historians.
5. Chase Bank (Now JPMorgan Chase): Chase Bank maintained open branches in Nazi-occupied France during the war. While the branches were technically controlled by the Vichy government, which collaborated with the Nazis, the presence of Western banks in Axis-occupied territories raised ethical questions.
6. Coca-Cola: Coca-Cola had a presence in Germany during the Nazi era, and its German subsidiary, Coca-Cola GmbH, continued to operate. There were reports that Coca-Cola’s German operations were allowed to continue with a degree of independence from Nazi interference.

Capitalism tends to trump morality, as greed and profiteering outweigh all other considerations for some.

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