Russia’s military actions in Ukraine and the resulting sanctions are affecting many businesses now and in the future. The new sanctions were adopted by European Union member states in the beginning of April. Russia’s aggression against Ukraine has led to a large-scale humanitarian emergency and displacement. The sanctions adopted, complement the EU sanctions already in place against Russia.
Sanctions as an administrative burden
The new sanctions expanded the number of individuals and companies that are in some way linked to Ukraine’s territorial integrity. The sanctions lists are constantly changing and represent a major administrative burden for companies, with sanctions having a wide-ranging impact on the business chain. Changing the business chain quickly is challenging and time-consuming if you must look for a completely new player.
In the financial sector, sanctions were extended by imposing a ban on providing direct and indirect support, including financing, to Russian public entities or institutions more than 50 % owned or controlled by the Russian state. A new measure was introduced to ban road transport by Russian and Belarusian companies on EU territory and to ban vessels under the Russian flag from entering EU ports. Sanctions can require companies to withdraw from the market, terminate contracts, shut down or sell their business. Businesses will have to consider, even what kind of corporate structure they might have and what kind of corporate model and structure might be possible in the future. Each of us hopes for an end to the military aggression, but there is no way of knowing when the situation will ease.
There are many exceptions to the sanctions, which are specified in the text of the regulation. The overall impact of the new sanctions imposed by the EU on trade between Finland and Russia will be significant, although Finnish exports to Russia have already decreased in recent months.
Effective risk management
The future direction of sanctions cannot be predicted, but it is possible to react quickly to any changes they bring. With NordCheck’s Modern Compliance platform, you can quickly act and take the necessary measures. Our modern compliance offering helps businesses look ahead and dynamically work proactively on a daily basis.
When you are responsible for the future of your business, quality management and risk identification cannot rely to spreadsheets. A complex and fragmented model is replaced by a modern solution that safeguards operations in an increasingly demanding environment, allowing management to respond quickly and effectively to a variety of situations, now and in the future.