As new sanctions against Russia become ever more complicated, causing a lack of clarity and increased risks, many foreign investment projects are being put on hold. Accordingly, it is important to understand the different types of sanctions and their implications.
Firstly, there are sanctions from the EU, US and other countries against over 200 Russian and Ukrainian individuals and legal entities. These sanctions forbid providing economic resources to listed persons or companies. The US sanctions also forbid economic contacts with companies, which are owned by 50 per cent or more by listed persons. EU sanctions do not generally forbid all economic contacts with companies owned by sanctioned persons, but can identify certain contacts with companies owned by over 50 per cent by the sanctioned persons as indirectly providing economic resources to the aforementioned.
Secondly, there are sectorial sanctions prohibiting arms exports to Russia, exports of goods of dual use, access to capital markets for certain banks and companies, and co-operation with companies regarding Crimean infrastructure (energy sector, telecommunication, production of mineral resources and transport infrastructure).
Finally, there are EU sanctions forbidding new investments in Crimea, including capital increase for existing legal entities.
At RUSSIA CONSULTING, however, we firmly believe that despite the sanctions there are many opportunities in Russia waiting to be exploited safely and profitably. With more than 140 million consumers and high infrastructure needs, Russia remains an interesting market for foreign investors, particularly within the fields of advanced engineering, construction, financial services, power and energy, airports, rail projects and water projects. Additionally, major events, such as the upcoming FIFA World Cup, present unique opportunities.
How to stay safe in the Russian market
RUSSIA CONSULTING offers a careful check of the ownership structure of your Russian counterparts according to the US, EU and Canadian sanctions regimes. With a unique search engine developed exclusively for the sanctions check and integrated with the Russian Commercial Register, RUSSIA CONSULTING can check almost any Russian company, including a check of the ownership structure of parent companies. The expert team analyses the results and lets you know whether Russian counterparts are affected by the sanctions and whether economic contact is permitted, as well as identifying any reputational risks. RUSSIA CONSULTING’s team of more than 500 specialists can advise you on any other area of doing business in Russia and can offer consulting services in accounting outsourcing, tax and legal issues, market entry and more.
To find out more please visit: www.russia-consulting.eu