Business Secretary Grant Shapps is under pressure to block any Russian steel from entering Britain “through the backdoor”.
The UK banned imports of steel from Russia after Vladimir Putin ordered his troops to invade Ukraine in February.
But industry sources fear steel from the regime is making its way into the UK via Turkey, where it is reprocessed before being shipped abroad.
They believe British businesses are being duped into buying steel that ultimately came from Russia - and could be pumping funds into the Kremlin war chest.
The EU has banned imports of Russian steel processed in third countries - and the British Government is being urged to impose the same measure.
Labour MP Stephen Kinnock, who chairs the All-Party Parliamentary Group on Steel, has written to Mr Shapps demanding he close the loophole.
In the letter, seen by the Mirror, he says: “Whilst the UK Government has implemented sanctions to prevent the import of Russian-made steel into the UK, significant quantities continue to be imported via third countries.
“This occurs when Russian steel companies export steel slabs and blooms – often at steep discounts – to third countries where the product is further processed and transformed for customs purposes into a product considered to have originated in that third country.
“This product is then exported to the UK with the ultimate consumer often not knowing they are buying Russian steel.”
Mr Kinnock said the UK imported almost £500million worth of steel from Turkey in 2021.
An estimated 6% was originally made in Russia before being processed in Turkey for British customers.
“Turkey's imports of slab steel from Russia are understood to have more than doubled in the five months to May compared to the same period last year, suggesting significantly more Russian originated steel may be coming into Britain,” warned Mr Kinnock.
“For reasons of moral imperative and strategic importance, the UK Government simply must close this loophole by banning all steel imports from the UK that originate in Russia – including those processed in a third country.”
UK Steel director-general Gareth Stace said: “The UK Government has already taken important steps to stop the import of Russian steel with a series of sanctions and tariffs, but loopholes remain and, unsurprisingly, Russian steel companies are doing their utmost to exploit them.
"Last month the EU extended its sanctions to cover Russian steel processed in third countries, cutting off an important supply route for Russian steel producers.
“With the EU moving quickly to close this loophole, there is a very real risk that more Russian steel will be diverted towards the UK market.
“We must ensure the UK’s sanctions are as effective as possible, rather than let Russian industry profit via the backdoor at the expense of UK steelmakers.”
The Mirror has been campaigning to Save Our Steel since 2015.
A spokesperson for Department for Business, Energy and Industrial Strategy (BEIS) said: “We have not seen any evidence of illicit Russian steel imports entering the UK market.
“The UK has moved faster and further than others, including the EU, in banning imports from Russia following their illegal invasion of the Ukraine.
"This includes steel products, where we have banned all finished steel and unlike the EU, we put in place a 35% tariff on all semi-finished steel.”
