Аrticles 09/03/2022 04/07/2022

Risks for business in cooperation with Russian and Belarusian companies

Daniel Globa

lawyer, deputy director of legal affairs YouControl

Risks for business in cooperation with Russian and Belarusian companies

Cooperation with contractors from aggressor countries and business with Russia and Belarus are undoubtedly risky, due to the extremely high probability of occurrence:

- negative financial consequences;

- operating losses;

- damage to reputation.

This is primarily due to the application of Ukrainian and international sanctions (USA, EU, UK, Canada and other countries).

Business risk can be:

- asset freeze;

- financial risks in business, limitation of financial and business transactions;

- prohibition of foreign economic activity, transit and transportation;

- cancellation of licenses and permits;

- entry ban;

- cessation of cultural, scientific and other exchanges.

We see how this is already being applied today and is destroying Russian and Belarusian businesses.

Often the mechanism of sanctions is designed in such a way that prohibitions and restrictions automatically apply to those who cooperate with companies under sanctions. Thus, these companies: Russian, Belarusian and all persons associated with them become "toxic".

In most cases, counterparties of a company that has been sanctioned are deprived of the opportunity to conduct any transactions with it: banks that carry out financial transactions effectively identify such risks due to modern analytical systems and block or even freeze financial assets. This entails the inevitable destabilization of such risky business.

Cooperation with any business from these countries means indirect support for international aggression, since military spending is funded by their taxes.

Such cooperation also draws the attention of law enforcement and control agencies. These authorities can conduct more detailed checks and find violations that were not so obvious before.

Due to open data sources and the media, the facts of such cooperation become public. Against the backdrop of general condemnation of the war in Ukraine, this spoils the image of companies that cooperate with businesses from aggressor countries. People around the world condemn the war, so their motivation to work in such companies is significantly reduced and business efficiency becomes low.

It all comes down to the fact that companies that want to work and develop should refuse any cooperation with enterprises from Russia and Belarus, their beneficiaries and partners. Right now.

Ignoring the situation and continuing business interaction with the occupiers today is equated with complicity in crime!

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