Addressing the Business Risk Caused by Russian Sanctions: IR Global Trade and Customs Report

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Since its invasion of Ukraine, Russia has become the most economically sanctioned country in
the world. In addition to the objective of having Russia withdraw from Ukraine, the sanctions
imposed on Russia, Belarus and the disputed Ukrainian provinces of Donetsk and Luhansk by
the United States of America, the European Union, Canada, and other mostly Western countries
(collectively referred to as “Russian sanctions” or “sanctions”) pose a serious business risk to
any individual or company that currently does business in any of these territories or with any
individuals or companies in those territories. The sanctions will also disrupt any potential future
business. In addition, the sanctions could affect any individual or business that unintentionally
deals with sanctioned goods, services, or individuals, recognizing that sanctions create a market
void that some traders may try to fill by mislabeling the sanctioned goods or by taking other
steps to circumvent the sanctions.

The risk posed by the sanctions goes beyond the loss or disruption of current or future business.
Any company that intentionally or unintentionally violates the sanctions could face seizure and
forfeiture of the goods, fines, imprisonment, or other penalties. Those companies would also
likely face more scrutiny from enforcement agencies, which could increase their cost of
compliance with the sanctions on an ongoing basis.

The business risk posed by the sanctions is very real and should not be ignored. Instead,
companies and individuals should determine their degree of exposure to the sanctions, the effect
on their current and future business, their potential exposure to penalties, and the steps that may
be available to them to reduce or eliminate those risks. Essentially, any company that is
potentially exposed to these risks should review their position as part of their ongoing due
diligence.

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