Sanctions Compliance for EU Businesses in Russia: Mitigating Legal Risks
Sanctions imposed by the EU, US, and Russia create complex challenges for European companies operating in Russia. From restricted payment flows to supply chain risks, businesses must navigate a dynamic legal landscape. This article explores how Turkish International Law & Consulting Firm helps EU firms ensure sanctions compliance and maintain lawful operations in Russia in 2025.
The Impact of Sanctions on EU Businesses
Sanctions affect:
Trade Restrictions: Bans on dual-use goods, energy, and technology.
Payment Barriers: Limited access to SWIFT for some Russian banks.
Counter-Sanctions: Russian restrictions on foreign entities (Federal Law No. 281-FZ).
Reputational Risks: Partnerships with sanctioned entities can harm credibility.
Understanding EU, US, and Russian Sanctions
EU Sanctions: Target specific sectors (energy, defense) and individuals, per Council Regulation (EU) No 833/2014.
US Sanctions: OFAC’s SDN list restricts transactions with designated entities.
Russian Countermeasures: Require local partnerships and currency controls under Federal Law No. 281-FZ.
Contract Reviews: Ensuring agreements comply with international and Russian law.
Ownership Analysis: Verifying UBOs to avoid 50% ownership by sanctioned entities.
Structuring Lawful Business Activity
To mitigate risks:
Neutral Jurisdictions: Use Turkey for payment flows or company setup (e.g., Limited Şirket).
Local Partnerships: Structure joint ventures compliant with Russian law.
Compliance Programs: Implement internal policies per FATF guidelines.
Managing Payment Flows
Currency Regulations: Adhere to Central Bank of Russia rules (Federal Law No. 173-FZ).
SWIFT Alternatives: Use SPFS (Russian SWIFT equivalent) or third-country banks.
Turkey as a Hub: Open accounts in Turkish banks (e.g., Ziraat Bank) for EU-Russia transactions.
Case Study: Sanctions Compliance for a German Manufacturer
A German industrial firm faced risks due to Russian counter-sanctions. Russian-Turkish Law & Consulting Firm:
Conducted a supply chain audit, identifying non-sanctioned partners.
Structured a Turkish Limited Şirket to facilitate payments.
Ensured compliance with EU and Russian regulations, avoiding penalties.
Conclusion
Sanctions compliance is critical for EU businesses in Russia. Turkish International Law & Consulting Firm, with over 20 years of experience, offers expert risk analysis and structuring solutions. Contact us to safeguard your Russian operations: +90 552 647-07-17.