Extraordinary, unprecedented and largely unexplained flows of millions of pounds of British luxury cars to Russia’s neighboring states continued in February, according to new official data.
British cars worth around £26 million were exported to Azerbaijan in February, according to HM Revenue & Customs data.
Figures show that in the last quarter this former Soviet state with developing economy status was the 17th largest destination for UK cars, larger than long-established export markets such as Ireland, Portugal and Qatar.
The rise of Azerbaijan has coincided almost a month ago with the imposition of sanctions on the export of automobiles to Russia.
British cars are prohibited from being shipped to Russia, both as “dual-use” goods, which could be reused as weapons, and, for any car over £42,000, under specific restrictions on luxury goods.
However, even as UK car exports to Russia fell to zero, they have increased dramatically to Russia’s neighboring states, including Kazakhstan, Kyrgyzstan, Georgia and, most importantly, Azerbaijan.
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While it is impossible to prove where those shipments ultimately end up, there is abundant anecdotal evidence that these countries are being used as conduits to smuggle prohibited products into Russia.
The latest data from HMRC shows that in the three months to February, the average value of cars shipped to Azerbaijan exceeded £115,000, making this small and relatively poor economy one of the largest luxury car markets. value of the world, along with Switzerland, Luxembourg and Saudi Arabia.
The total value of UK car exports to Azerbaijan in the two years since the invasion of Ukraine and the imposition of sanctions now stands at £523m. That compares with £58 million in the two years immediately preceding.
The British motor lobby, the Society of Motor Manufacturers and Traders (SMMT), has insisted that this 800% increase can be explained by factors internal to the Azerbaijani economy, and is not related to Russian sanctions.
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March: Rich Russians continue to buy British-made luxury cars
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An SMMT spokesperson said: “UK car manufacturers comply with all trade sanctions and would condemn any party that jeopardizes that commitment. Car exports from UK factories to Azerbaijan have increased since 2019 due to multiple factors including major new model launches and pent-up demand and a growing domestic appetite for UK luxury cars In fact, UN data shows that only two cars of any origin have been officially exported from Azerbaijan this year. to Russia.
“We have never ruled out the possibility that third parties could exploit any vulnerability in the sanctions regime, and manufacturers do everything in their power to prevent this. Any UK-made vehicle sold in Russia arrived there without their authorization. This is “It is a rapidly evolving global issue that spans products across multiple sectors in many countries implementing sanctions, and addressing any vulnerabilities requires a coordinated global response.”
However, while United Nations (UN) data suggests that the number of cars officially exported to Russia remains low, that same evidence suggests that, far from behaving like a normal car market, Azerbaijan appears to be channeling cars to other places in Central Asia.
Contrary to SMMT analysis, which suggests that car exports can be explained by domestic factors, Azerbaijan’s car exports have increased by 4,800% since Russia’s invasion, with the majority of cars destined (according to UN data ) to Kazakhstan, Kyrgyzstan, Georgia and the United Arab Emirates.
According to UK government sources, these states are understood to be widely used as conduits for goods to Russia.
Cars are not the only British products to have seen a huge increase in exports to Central Asia and the Caucasus; so have the components and machinery used to make weapons. On a visit to Kyrgyzstan this week, Foreign Secretary Lord Cameron admitted that Russia is using Central Asian countries to circumvent sanctions and build its “war machine”.