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."
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