CIS and Russia news, updates and analysis | Page 2 of 3

There’s an old Russian joke about a foreigner who visits the Soviet Union. Knowing his letters will be read by the state censor, he devises a system to communicate with friends back home. If his letter is written in black ink, the message is true. If it is written in red ink, the message is false. Eventually his friends receive a letter from Russia written in black ink: ‘Dear friends, I hope this letter reaches you. Contrary to the lies in our press, life in the Soviet Union is wonderful. Food is plentiful, apartments are spacious and well heated, and there are no shortages. In fact, the only thing I can’t find here is red ink.’

Asking international lawyers about the year they have just had in the Russian market is a similar exercise in reading between the lines. While many firms report that they are still making money, fuelled largely by a boom in restructuring work, this picture is undoubtedly airbrushed by lawyers’ unwillingness to discuss the negatives. No-one, however, is in any doubt that the precipitous decline of the Russian market is hitting revenues. Continue reading “Aboard the propaganda train – sweat and spin amid a turbulent Russian market”

Russia-based lawyers are a hardy bunch, conditioned to working in a volatile market where ups turn into downs on an almost annual basis. No matter how good things might appear, they are well aware that some form of political interference or economic disaster might be lurking around the cor­­ner. Most get by on the knowledge that Russia’s lucrative market is remarkably robust and that in the long term it always seems to bounce back.

Yet, even for the most seasoned western lawyers who went through the Russian sovereign debt default of 1998, the events of 2014 are proving an altogether different experience. While previous Russian misdemeanours were largely tolerated – be it the Russo-Georgian war of 2008 or the politically motivated imprisonment of Mikhail Khodorkovsky in 2003 and the subsequent dissolution of Yukos – it has been impossible for the West to ignore Russia’s actions in Ukraine. Russia’s annexation of Crimea in March 2014, the subsequent war and support of separatists in Ukraine’s eastern Donbass region, and the inevitable ratcheting up of economic sanctions from the US, EU and other western states, has led to a situation so intractable that few can see an obvious way out. Continue reading “Chasing the bear – Sanctions bite on Russia’s legal market”

While their transactional colleagues in Moscow are suffering, the current sanctions on Russia have been a boon to trade and sanctions lawyers, who are fielding countless enquiries from Russian and international clients. The fact that the sanctions are so multi-layered, leaving plenty of scope for interpretation, has increased the demand, particularly when it comes to deciding what constitutes a controlling stake in a company, something that was relevant to the designated Russian individuals who were named in the first few rounds of sanctions and who owned stakes in many different companies. This uncertainty has, in many respects, been more damaging to Russian business than the sanctions themselves, something that the US authorities were fully aware of when they rolled them out.

‘I spoke with US officials on behalf of certain clients and said to them that greater precision in the sanctions-related announcements could make it easier for the US companies to comply,’ says Jeremy Zucker, co-chair of Dechert’s international trade and government regulation practice. ‘On multiple occasions, the US officials responded that the imprecision was deliberate because the uncertainty it develops among American industry leads to greater pull-back from Russia than is actually required by the sanctions themselves. As with a blanket ban, greater precision would remove much of that element of choice.’ Continue reading “Straining the bonds – why disputes counsel is high on the agenda in Russia”