Sanctions, Foreign Agent Law, and Market Access: How EU Companies Can Still Operate in Russia (2025 Guide)

Despite increasing geopolitical pressure, many EU-based businesses continue to deliver services, manage contracts, or hold assets in Russia — either directly or through local partners.

However, navigating the legal and reputational risks posed by international sanctions, the foreign agent law, and Russia’s shifting compliance landscape requires a well-informed and legally sound strategy.

At RT-Union – Russian-Turkish Law & Consulting Firm, we support European businesses in assessing risks, maintaining legal presence, and avoiding enforcement action — while continuing to serve the Russian market.

Yes — with careful structuring and compliance monitoring, EU companies may:

• Continue pre-existing contracts (subject to sanctions compliance)
• Receive payments from Russian clients
• License technology and provide services
• Maintain local offices and staff
• Own or manage assets (property, shares)

Operations must not violate EU sanctions, Russian countermeasures, or third-party export controls.

RT-Union provides cross-border risk audits and legal guidance for all stages.

The Federal Law No. 255-FZ (2022) establishes criteria under which organizations or individuals may be designated as “foreign agents” in Russia.

Triggers for designation include:

• Receiving foreign funding or material support
• Engaging in political, media, research, or public advocacy
• Operating in sensitive sectors (defense, civil society, elections, etc.)

Consequences:

• Inclusion in official registry
• Reporting and labeling obligations
• Reputational and contractual risks
• Potential audits or administrative prosecution

Most commercial companies are not automatically at risk, but proper structuring is essential.

European companies must track:

1.Sanction Type: Sectoral sanctions
– Applies to: Defense, dual-use, energy, finance

2.Sanction Type: Individual sanctions
– Applies to: Russian nationals and companies

3.Sanction Type: Trade restrictions
– Applies to: Tech, software, machinery exports

4.Sanction Type: Financial restrictions
– Applies to: Use of sanctioned banks and systems

5.Sanction Type: Services embargo (EU 10th Package)
– Applies to: Auditing, consulting, legal services

Key risk areas:

• Use of designated Russian counterparties
• Workarounds via third-country structures
• Lack of screening mechanisms
• Cross-border service exports (esp. in IT, law, finance)

RT-Union provides KYC/AML review and sanctioned party screening.

EU companies working with Russian partners can consider:

• Option: Representative Office

– Description: Limited to non-commercial activity (e.g. liaison)

• Option: LLC (OOO)

– Description: Full local presence with separate legal entity

• Option: Distributor/Agent Model

– Description: Operate via third-party Russian partner

• Option: Independent Contractors

– Description: Structure via localized B2B agreements

Each model carries different compliance and tax implications — RT-Union builds the structure based on your goals and risk appetite.

RT-Union advised an Italian software firm with over 20 Russian corporate clients. The firm:

• Was not on sanctions list
• Used Russian freelancers and collected fees via Turkey

We:

• Audited their contract structure
• Re-registered their brand in Russia under local legal entity
• Ensured no service overlaps with banned sectors
• Registered local tax reporting and IP rights
• Avoided foreign agent risk entirely

Result: zero legal exposure, full operational continuity

Is it illegal to be paid from Russia if I’m an EU business?
Not inherently — as long as you do not transact with sanctioned persons or sectors. RT-Union provides payment channel strategy.

What is the penalty for being designated a foreign agent?
Administrative liability, reputational damage, and in some cases, limitation of contracts. Designation is not criminal, but must be proactively avoided.

Can I work with Russian partners through a third country?
Yes — but “bypass” schemes may violate EU/UK/US regulations. We design compliant structures that withstand audit and banking scrutiny.

Can I provide IT, legal, or accounting services to Russia?
Only within permitted scopes. Certain categories are restricted by EU sanctions — we analyze each case individually.

• Strategic legal risk assessments (Russia + EU law)
• Legal representation in Russia, with real-time compliance tracking
• Local registration and structuring for foreign entities
• KYC, contract review, and sanctions filtering
• Multilingual legal support (ENG / FR / DE / RU / TR)

We don’t play in gray zones — we build solid legal structures for sustainable presence.

🕊️ Still serving Russian clients or holding assets?

Let RT-Union design your Russia-facing strategy — compliant, protected, and operational.

📞 Book a confidential risk assessment with a cross-border lawyer.

👉 Protect Your Business with RT-Union