Between a Rock and a Hard Place: Ways for International Companies to Continue Doing Business in Russia in the face of Foreign Sanctions and Russian Countermeasures

Numerous foreign countries have ratcheted up sanctions pressure on Russia since February 2022. Thousands of Russian companies and individuals have been placed on sanctions lists. Russia does not recognize these sanctions as legal on its territory. Government agencies and courts have given negative assessments of compliance with sanctions restrictions, which may also entail risks for companies and management. In addition, Russia has introduced a number of retaliatory countermeasures that significantly limit numerous transactions and operations. The current situation is a major challenge for international companies that continue to operate in Russia, as well as prominent Russian companies operating abroad. On the one hand, the failure to comply with foreign sanctions puts an entire group at risk because, in many cases, such companies are required by foreign laws to comply with the sanctions. On the other hand, compliance with foreign sanctions for companies operating in Russia exposes them to the risk of liability, sanctions, and other negative consequences on Russian territory. Foreign companies that remain in Russia are also subject to many of the requirements and restrictions of Russian counter-sanctions legislation, despite their decision to continue developing their business. Such companies find themselves between a rock and a hard place.