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For St. Louis firms with operations in Russia, sanctions could create 'giant legal headache'

"Any firm that has investments in Russia has a number of massive problems that have appeared," said Dale Walton.
Credit: AP
People stand in line to withdraw money from an ATM in Sberbank in St. Petersburg, Russia, Friday, Feb. 25, 2022. Russians flocked to banks and ATMs on Thursday and Friday shortly after Russia launched an attack on Ukraine and the West announced crippling sanctions. According to Russia's Central Bank, on Thursday alone Russians have withdrawn 111 billion rubles (about $1.3 billion) in cash. (AP Photo/Dmitri Lovetsky)

ST. LOUIS — St. Louis firms that have operations in Russia may be exposed to problems created by sanctions imposed upon the country after its invasion of Ukraine, which began last week.

Local companies that have announced Russian operations in recent years include industrial products provider Emerson Electric (NYSE: EMR), brewer Anheuser-Busch InBev (NYSE: BUD) and manufacturing tech giant Barry-Wehmiller. Others like agricultural commodities distributor Bunge (NYSE: BG) have suspended operations in Ukraine.

"Any firm that has investments in Russia has a number of massive problems that have appeared," said Dale Walton, associate professor of international relations at Lindenwood University.

One is the move by the U.S. and European nations over the weekend to cut key Russian banks off from the Society for Worldwide Interbank Financial Telecommunication (SWIFT), which provides services related to the execution of financial transactions.

"Not having access to SWIFT means that all of a sudden any settlement of international trade becomes enormously complex," Walton said, adding that the crash of the Russian ruble could be another obstacle. "There are ways around the SWIFT system, but those are convoluted."

Also problematic for western firms are the sanctions already imposed on Russia — and whatever more is coming. The U.S., for example, already banned transactions with the Russian central bank, the Russian National Wealth Fund and the Ministry of Finance.

"Any firm that's doing business in Russia right now is facing a giant legal headache of trying to figure out what they can do legally," Walton said. Lawyers at firms with Russian operations are likely "furiously trying to figure out what the relevant law is."

Click here for the full story from the St. Louis Business Journal.

    

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