Western companies seek legal advice on potential return to Russia

Western commodity and shipping companies are reportedly starting to consult law firms to assess the possibility of doing business with Russia again, in preparation for a potential easing of US sanctions against Russia.

According to the Financial Times (FT), the move is driven by the potential for closer ties with Moscow following the re-election of US President Donald Trump.

According to the newspaper, Trump’s desire for closer ties with Moscow has raised the possibility of easing some restrictions that until recently seemed unrealistic.

In response, Western companies are seeking advice from lawyers on restructuring their operations to re-establish trade with Russian companies, even if European Union (EU) and United Kingdom (UK) sanctions remain in effect.

Sam Tate from the law firm Clyde & Co stated that the current differences in approach between the US and Europe are “a serious problem for the business world.”

Tate added, “Some companies are planning such changes in their operations and are exploring how they can prepare for them.”

Sanctions expert Daniel Martin from the law firm HFW recalled that historically, Western companies have almost always shaped their operations according to the US measures, which were “the most restrictive.”

Martin stated that now clients are asking whether they need to rearrange these programs primarily to align with Europe, given the more aggressive stance of the EU and the UK against Russia.

According to Martin, the matter at hand is “mapping out what is happening now” in order to “best assess what might happen from the US perspective.”

The lawyer thinks that if US sanctions are eased, oil traders will likely move faster towards re-engaging with Russia than oil producers, who would need larger investments for this.

Leigh Hansson from the law firm Reed Smith, however, is of the opinion that even if the US starts to ease restrictions on trade with Russian companies, most multinational companies will still be limited by EU and UK sanctions.

According to Hansson, large energy companies and similar multinational companies “will continue to have representation in the EU or the UK.”

Hansson noted that companies in Asia or the Middle East could expand their existing Russian business, potentially benefiting from opportunities related to the easing of US sanctions more than Western firms.

Hansson added that firms that have been dealing with such business for the past few years will continue to do so, and this will earn them substantial profits.