In sanctioned Russia
East Committee sees good reasons for business
03/22/2022, 12:40 p.m
The Western sanctions aim to change the behavior of the leadership in Moscow and not to impoverish the population. That’s why the Committee on Eastern European Economic Relations considers it perfectly legitimate to do business with Russia. However, concerns are growing on the Russian side.
The Committee on Eastern European Economic Relations defends the business activities of member companies in sanctioned Russia. There are a number of sectors “in which further economic activity is not only legal, but also legitimate,” said Committee Chairman Oliver Hermes.
The aim of the Western sanctions policy because of the Russian invasion of Ukraine is a change in the behavior of the leadership in Moscow, but not the complete destruction of the Russian economy and the impoverishment of the population. Some areas were therefore deliberately not sanctioned. This included, for example, the provision of medicines, medical goods and food for basic needs as well as securing the necessary raw material and energy supplies to the EU. This also includes the agricultural sector.
“Russia, like Ukraine, supplies the world market with much-needed agricultural products such as grain,” Hermes said. “Sanctions in this area would lead to further shortages and price increases and hit the poorest countries in particular.” Added to this is the responsibility of German companies for their 280,000 employees in Russia.
“A sale of production facilities would hardly be possible at the present time anyway and would play into the hands of market participants from countries that do not implement the sanctions against Russia,” said Hermes. There was also the threat of contractual penalties up to the complete loss of assets and legal consequences for senior employees. “We therefore firmly reject blanket condemnations of companies that are still active on the Russian market,” said Hermes.
There are also well-founded business relationships within the framework of the sanctions policy. However, these are increasingly being called into question by the Russian side. “Plans by the Russian government for external management of foreign companies are jeopardizing the continued existence of companies and thousands of jobs in Russia,” warned the business representative. “Should foreign companies and their subsidiaries be forced to flout Western sanctions, it would result in an exodus from Russia.”