Russian and Belarusian companies are avoiding sanctions put in place after the war in Ukraine began to continue doing business in the UK, ministers have been told.
Labour MP Siobhain McDonagh said a Belarusian manufacturer was still trading in the UK by importing goods from Russia, due to loopholes in the trade restrictions on both countries.
The Mitcham and Morden MP raised the case of a group of British companies who make parts for rolling garage doors, which used to do business with a Belarusian aluminium supplier.
She told MPs: “In response to the war, they did the right thing. They made the decision to abandon their exclusive contract with the Belarusian manufacturer and source the components from elsewhere in Europe, a decision that was expensive, risky and lengthy, but nevertheless the right thing to do.”
But Ms McDonagh added: “The original Belarusian supplier is now managing to circumvent these sanctions and is continuing to import banned products.
“They are also able to pay the relatively low additional tariff of 35% with ease, enabling them to operate very competitively within the market.
“Whilst the British business based in my constituency has played by the rules and has had to find a more expensive manufacturer elsewhere in Europe, the Belarusian company appears to be stealing the customer base by avoiding the sanctions, absorbing the additional tariff, and supplying at an undercut rate.”
She went on: “They are avoiding sanctions by starting some of their goods in Russia.
“There is a list of sanctioned product codes for Russia and there is a list of sanction codes for Belarus.
“In some instances the two lists of sanctioned products do not match, and as a result you could have a product that is sanctioned in Belarus but not sanctioned if it comes from Russia.
“From one day to the next, the Belarusian company supposedly managed to move an entire factory-worth to Russia so that they can still import the goods sanctioned from Belarus into the UK free of tariff, all the while undercutting a British business.”
Describing the situation as “absurd”, the Labour MP said: “I hope that the minister can provide more information about that and about what we are going to do to close the loopholes that Russia and Belarus are currently using.
“We can have the toughest regime on paper, but if Russia and Belarus are finding ways round in practice and costing UK businesses we have not done the right thing.”
Foreign Office minister David Rutley said the Russians were “doing everything they can to try and avoid these sanctions, because they are biting on their economy”, adding: “We continually need to refresh our sanctions approach to respond to that, and we are.”
Mr Rutley told the Westminster Hall debate: “We will continue to bear down on Russia and Belarus by implementing further sanctions and leaning in to tackle Russia’s attempt to circumvent measures already in place, as we have done over the past year.
“This means coming down hard on sanctions evaders, closing loopholes and working with international partners to undermine Russia’s attempts to build global resilience to Western sanctions.”