UK Sanctions Gold, Oil Networks Financing Russia’s War Against Ukraine

Published: 09 November 2023

Sanctioned UK Gvt

The U.K. Wednesday sanctioned 29 individuals and entities across Russia’s gold and oil sectors for financing the Kremlin’s war against Ukraine. (Photo: U.K. Government, License)

By Henry Pope

Great Britain on Wednesday sought to choke off money and materiel keeping Russia’s war against Ukraine going, sanctioning 29 individuals and entities across Russia’s gold and oil sectors as well as those providing banned electronic components.

U.K. Foreign Secretary James Cleverly said gold and oil are “critical sources of revenue for the Russian war machine,” with Russia’s gold industry generating £12.6 billion (US$15.5 billion) for its economy in 2021, the year before the invasion.

The two markets have provided critical revenue streams that finance the country’s war machine, which has torn Ukraine asunder for more than 20 months.

London’s latest sanctions seek to undermine those who prop up Moscow’s gold and oil industries, such as the Ural Mining and Metallurgical Company and Highland Gold Mining Limited.

Companies deemed to have engaged in sanctions evasion on behalf of the Kremlin’s interests were similarly blacklisted.

One such entity is Paramount Energy & Commodities DMCC, an outfit which the U.K. says employs “deceptive shipping practices” and “opaque ownership structures” to allow Russia to bypass oil sanctions imposed by G7 member states.

Another is Paloma Precious DMCC, a UAE-based network “responsible for channeling more than $300m in gold revenues to Russia,” the Foreign Secretary’s Office said.

None of the companies mentioned immediately responded to requests for comment.

The U.K. is not the only country to target Russia’s well-heeled gold sector. In March last year, U.S. President Joe Biden signed an executive order barring all transactions with Moscow’s central bank gold reserves, then valued at roughly US$130 billion.

Also targeted was a covert procurement network used to acquire critical western technology. OOO TK Fly Bridge, a company procuring dual-use goods for Russian electronics producers NPP Istok and Ecitech, was sanctioned along with Maksim Ermakov, founder of OOO TK Fly Bridge, and eight NPP Istok board members.

To date, London has sanctioned more than 1,800 individuals and entities, including 129 oligarchs with a combined net worth of £145 billion ($178 billion), in an attempt to block Moscow’s long-term efforts to finance its occupation of Ukraine’s eastern regions.

Since Russian President Vladimir Putin ordered his tanks to cross into Ukraine in February 2022, Cleverly said, the U.K. has blocked more than $400 billion that otherwise would have sustained the invasion.

“But we must keep tightening the screws on Moscow,” Cleverly continued. ““As we root out and close down these circumvention avenues, we’ll continue to box Putin in and make sure his faltering war effort in Ukraine ends in failure.”