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The head of the UK’s Treasury select committee has warned that western sanctions against Russia are failing to hamper its economy, as campaigners urged enforcement officials to take a tougher stance on blacklisted entities.

Harriet Baldwin, Conservative chair of the committee, spoke out ahead of MPs launching oral evidence sessions to investigate the effectiveness of government designations against Moscow on Tuesday.

In an interview with the Financial Times, Baldwin said: “There’s a general consensus that sanctions are not working in terms of their stated intent — causing real trouble for the Russian economy . . . The IMF are forecasting it’s going to be one of the strongest economies this year.

“The really serious thing is that the money is going into their defence budget . . . to be used attacking Ukrainians,” she added.

The committee’s inquiry, due to report in July, has received written evidence from anti-corruption NGOs calling for the Office of Financial Sanctions Implementation (OFSI), the UK sanctions enforcement body, to take a more robust approach towards punishing breaches.

Baldwin highlighted that the first raft of designations imposed after Russia launched its invasion of Ukraine in February 2022 were more than two years old.

“The longer sanctions are in place, the more ways people find to get around them, and it’s pretty obvious that patterns of trade are changing to allow exactly that,” she said.

The US-led oil price cap on Russia’s oil sales — one of the key western economic sanctions against Moscow — “is obviously not really working terribly effectively”, Baldwin noted, adding more work was needed to ensure the mechanism achieved its objectives.

The FT reported last November that the cap is being widely circumvented, according to western officials and Russian export data. A significant factor in Russia’s ability to counter the measures has involved building up a “shadow fleet” of ageing oil tankers to get around western markets.

Baldwin stressed the UK should seek to improve the effectiveness of its sanctions regime in tandem with the US, EU and other allies, rather than act unilaterally, but identified industries where Britain has a global leadership role and could do more.

The maritime and insurance sectors were “two areas where the UK has a particular locus, where we could potentially come up with some tightening” to better limit access by sanctioned entities and individuals, she said.

Baldwin also warned there were pressing questions about the effectiveness of the OFSI and whether it needed more resources, after critics complained the body has issued a low number of fines.

Spotlight on Corruption has submitted evidence to the committee urging the government to ensure the OFSI “ramps up its civil enforcement efforts to provide robust deterrence against sanctions evasion”.

The charity acknowledged that the OFSI’s workforce has more than tripled since the Ukraine war began but claimed its investigations have “not translated into significant enforcement outcomes”.

Since its creation in 2016, the enforcement body has “rarely resorted to monetary penalties”, having imposed just nine fines across all sanctions regimes following 1,200 suspected breaches.

The NGO Transparency International called for more co-ordination between the OFSI and financial services regulators to crack down on high-risk payments and cryptocurrency firms.

Government insiders said the OFSI was investigating a higher number of complex cases following the expansion of its workforce, with investigations based on intelligence, not only breach reports from industry.

New fines resulting from breaches of the 2022 Russia sanctions are expected to be announced this year.

The Treasury said: “Since the start of Putin’s illegal invasion of Ukraine the UK has sanctioned over 2,000 people and entities connected with Russia, with the OFSI significantly upscaling its resource at speed to support that robust response.”

The OFSI “pursues sanctions non-compliance vigilantly and has handed out over £20mn in fines since 2019”, it added.