Russian firms have routed $8bn of trade through British island territories since invasion of Ukraine | Russia

Russian companies have used Britain’s secretive island territories to conduct $8bn (£5.9bn) of trade since the invasion of Ukraine, according to a report that highlights the flow of goods ranging from oil-drilling equipment to luxury yachts linked to Moscow’s political elite.

The analysis, published a day after the fourth anniversary of Russia’s assault on its neighbour, raises questions over the role played by the British overseas territories in enforcing sanctions designed to turn the screw on the Kremlin.

Written in exile by the Russian office of the anti-corruption group Transparency International, the report uncovers trade deals involving more than 150 luxury yachts, dozens of aircraft and equipment destined for Russia’s money-spinning oil sector.

Analysis of 29,000 transactions identified:

• 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, uncovered by scouring official data, was routed through four territories: the British Virgin Islands, Bermuda, the Cayman Islands and Gibraltar.

Most transactions took place in the immediate aftermath of international sanctions being imposed in 2022, although Transparency International also found many more recent deals in the data, which runs up to January 2025.

Deals in 2022 include 65 transactions that use the description “yacht”, often using offshore entities as part of transfers between Turkey and the Russian port of Sochi, across the Black Sea.

The number of yacht trades increased to 97 in 2023, including deliveries to parts of Crimea that had been annexed by Russia.

One of the vessels that appears in Cayman Islands trade data, the $100m (£74m), 74-metre Universe, has previously been linked to Dmitry Medvedev, the deputy chair of Russia’s security council and the country’s former president, who is sanctioned by the UK.

Another, named the Marlin, was delivered to Russia via a Cayman Islands company in 2022, trade data showed.

According to a report by the independent Russian media outlet Proekt, it was bought by the oligarch Suleyman Kerimov, who then gave it to a senior figure in Vladimir Putin’s inner circle. Kerimov is also on the UK sanctions list.

A spokesperson for Cayman Finance said UK sanctions laws applied on the island and were “immediately enforced”. They said more than $9.7bn (£7.2bn) of Russian assets had been frozen as part of a joint effort with the UK government known as Operation Hektor, adding that the UK minister for overseas territories, Stephen Doughty, had called the operation an “excellent example of best practice”.

Of the $8bn in trade analysed by Transparency International, $4.4bn involved companies in the British Virgin Islands (BVI), whose government has been warned by the UK for dragging its feet on plans to introduce a publicly available register of corporate ownership.

Companies linked to the family of the sanctioned pro-Russian former Ukrainian president Viktor Yanukovych have reportedly sent coal mined in the occupied territories of Ukraine to Turkey, according to the Latvia-based Russian outlet iStories.

The proceeds from these sales were reportedly routed to offshore accounts registered to a BVI company found in the trade data.

Transparency International said the BVIs were unusual among the overseas territories in that most of the transactions involving the islands were exports from Russia, including the purchase of natural resources from Russian companies.

“This may indicate a particular priority for Russian companies in their attempts to conceal trade income,” researchers said.

A BVI spokesperson said the data “does not appear to refer to any actual sanctions breaches”, adding that the BVI had frozen more than $400m in Russian assets in 2022.

The islands’ government has created a dedicated sanctions unit to implement and enforce UK sanctions locally, the spokesperson added.

The second most commonly used jurisdiction among the overseas territories is Bermuda, with a volume of nearly $3bn.

Russian companies used Bermuda entities to pay for drilling equipment in the oil and gas industry, the report found, including gas turbines and piles destined for a division of the Sakhalin Energy group, which is building the vast Sakhalin-2 oil and gas pipeline.

The UK oil company Shell pulled out of the Sakhalin project in 2022 and it is now majority owned by the Kremlin-backed Gazprom.

A Bermuda company also appears to have acted as the intermediary in the $55m sale by a Dubai-based company of an Airbus RA-73417 aircraft, which Russian journalists have reported was bought by the family of the sanctioned Chechen warlord leader Ramzan Kadyrov.

“Unfortunately, for many years now, we have observed a dysfunctional equilibrium in which illicit financial flows, tax evasion, sanctions circumvention and other forms of misconduct are channelled through firms and intermediaries registered in unaccountable jurisdictions,” Transparency International said.

The UK government has demanded that overseas territories such as the BVIs and Bermuda and crown dependencies such as Jersey and the Isle of Man introduce fully accessible registers of beneficial ownership.

However, the UK has been accused of caving in to the BVI government by allowing it to limit who can access its new register.

Gibraltar said it was a “leader in transparency” as the first overseas territory to establish a register of beneficial ownership, adding that transactions involving Gibraltar companies made up less than 1% of the trade in the report.

The Guardian approached representatives of Bermuda for comment.