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Ukraine – guidance for business

8 March 2022 / Insight posted in Article

With the current war in Ukraine looking like it will continue for many weeks, if not months, businesses need to be aware of the changes and restrictions that may affect them, along with the need to support their employees’ wellbeing.

Links with Russia

The list of companies cutting ties with Russia is growing – so do the risks if organisations do nothing and maintain their links with Russia. They will face growing pressure from customers, investors and other stakeholders to speak out against Russia. Failure to take a stand could lead to damaging headlines and possible boycotts – silence may be assumed or interpreted to be support of Putin.

Increasing energy costs

Many European countries are heavily dependent on Russian energy, particularly gas through several vital pipelines, so cost and supply will be factors both now and going forward. As oil prices surge, it is clear energy costs are going to continue increasing significantly with the resultant knock on effect for businesses. Add in surging inflation, tangled supply chains and falling share prices, early discussions and planning on the impact of rising costs on business is critical.

Supply chains

Global transport is already being severely disrupted with no fly zones, as well as rail freight and ocean shipping routes being affected. Businesses must be prepared for supply chain disruption, and therefore they should regularly review their contingency plans, liaise with suppliers and factor in cost increases as well as delays for customers.

Risk register

Add geopolitical instability to your risk agenda – and consider your market and decide whether to realign your business proposition in light of events.

Sanctions

As Russia bears the brunt of an ever increasing list of sanctions on the state, corporations and numerous individuals, repercussions for the global economy and individual businesses are becoming apparent. Breaches of financial sanctions are criminal offences, punishable by fines and/or a prison sentence, so it is important to keep up-to-date with the latest guidance as this is constantly changing and evolving. Clearly communicate policies and procedures both internally and externally, implement a risk-based sanction screening process. Where required, audit the success of this through independent testing and regularly review sanction screening policies, procedures and training.

Economic Crime Bill

The Economic Crime Bill, expected to become law by the end of the month, is designed to stop Putin’s allies from laundering money and hiding wealth in the UK. The legislation will create a register of overseas ownership of UK land and property, overhaul Unexplained Wealth Orders and make it easier to prosecute anyone involved in sanctions-busting.

Exports

The Export Support Service is operating a dedicated helpline on 0300 303 8955.

Employees

It is understandable that employees may be concerned about the conflict, so it’s important businesses show compassion, sensitivity and support to all employees who are affected, particularly Ukraine and Russian nationals. Please click here for detailed guidance on how businesses can support their people.

Employers should also be clear on expectations of staff when commenting on the Ukrainian crisis, especially on social media, as personal extreme comments can be linked back and negatively impact a business.