FT: Western firms seek legal advice ahead of possible US sanctions easing on Russia

Commodity traders, insurers and shipping firms are among a growing number of Western businesses consulting legal experts on how to resume dealings with Russia, in anticipation of a potential softening of US sanctions against Moscow.

Following the sweeping sanctions imposed by the US and its allies after President Vladimir Putin launched a full-scale invasion of Ukraine in 2022, many Western companies abandoned their Russian operations, Caliber.Az reports per The Financial Times.

However, US President Donald Trump’s push for renewed ties with Moscow has led some to reconsider their position.

Legal advisers say companies are now exploring how to reconfigure their operations to allow for a return to trading with Russian entities, especially if the US relaxes sanctions while the UK and EU maintain theirs.

“The bifurcation of the US and Europe is a major issue for business at the moment,” said Sam Tate, global head of regulatory and investigations at law firm Clyde & Co. “Some companies are planning for this change and what it means for their business and what they can do to prepare for it,” he added.

Daniel Martin, a sanctions specialist at HFW, noted that firms have traditionally shaped their compliance policies around US regulations, typically the most stringent. Now, clients are reassessing whether to shift that focus to align with the EU’s tougher stance on Russia.

“It doesn’t seem likely to me that any sort of sanctions relief would involve all US sanctions being lifted straight away,” Martin said. “Right now it’s a question of, ‘let’s map out what’s in place at the moment and let’s make our best estimate of what might happen from a US perspective’.”

Should US measures be eased, Martin suggested oil traders might be faster to resume business with Russia than oil producers, who would require more significant investment. Still, he warned that firms must account for the possibility that sanctions could be reimposed if Putin is seen to breach any agreement.

“There may well be traders who can see that there are lucrative commercial opportunities in re-engaging in this trade, but if they can’t get their banks, insurers and carriers back on board, then they may find that more difficult,” he said.

Many companies are also bound by financing agreements that compel compliance with sanctions from the US, EU and UK. Insurers, too, may hesitate to support renewed Russian dealings.

Leigh Hansson, a partner at Reed Smith’s global regulatory enforcement group, said that even if Washington were to ease restrictions, EU and UK measures would continue to bind most multinationals.

“Energy majors and those kinds of multinational companies are still going to have an EU or UK presence — it’s very difficult to find one that doesn’t — or they will employ EU or UK nationals, so they will be bound by the sanctions,” Hansson said.

Martin added that European firms could, in theory, establish US-based subsidiaries staffed with non-EU nationals to benefit from any relaxed American rules — but such moves would be expensive and only worthwhile if the business case were compelling. “You would have to ringfence it from all UK, EU support — whether that’s legal, compliance, insurance, risk, finance,” he said.

Companies based in Asia and the Middle East, less constrained by Western sanctions, may be best positioned to capitalise on any US policy shift. “The same companies that have been very aggressive in the past few years will continue to do so,” Hansson said. “They might be emboldened by this. There is a lot of money to be made.”

By Aghakazim Guliyev