Foreign Secretary Liz Truss said the ban on services exports to Russia would cut them off from doing business with UK sectors that are critical to the Russian economy. The new measures will mean Russia’s businesses can no longer benefit from the UK’s accountancy, management consultancy and PR services, which account for 10% of Russian imports in these sectors.
The government says these latest measures will further ratchet up economic pressure on Putin’s siege economy, bearing in mind Russia’s heavy reliance on Western services companies for the production and export of manufactured goods.
Foreign Secretary Liz Truss said: “Doing business with Putin’s regime is morally bankrupt and helps fund a war machine that is causing untold suffering across Ukraine. Cutting Russia’s access to British services will put more pressure on the Kremlin and ultimately help ensure Putin fails in Ukraine.”
Business Secretary Kwasi Kwarteng said: “Our professional services exports are extraordinarily valuable to many countries, which is exactly why we’re locking Russia out. By restricting Russia’s access to our world-class management consultants, accountants and PR firms, we’re ratcheting up economic pressure on the Kremlin to change course.”
Iain Wright, Managing Director, Reputation and Influence, ICAEW, said: “The UK government has announced a further package of sanctions aimed at demonstrating to the Russian elite the political and financial costs of their aggression against Ukraine.
“Many of our individual members and member firms have already taken proactive steps to disengage as appropriate with Russia. ICAEW is confident that chartered accountants, whether in practice or in business, will be ready and willing to play the fullest possible role in making these further measures effective,” Wright added.
Since the war in Ukraine began, major steps by the biggest firms to distance themselves from Russia has seen the Big Four firms remove their Russian firms from their networks and Grant Thornton cut ties with its Russian firm. This latest move ups the ante on the need for firms to sever ties with Russia, although questions remain about how the ban will work in practice.
To date, the UK has sanctioned more than 1,600 individuals and entities. However, ICAEW last month urged its members to look hard at any connections with Russia among their clients and perform careful due diligence, and warned that the reputation of the profession was at stake. “Sanctions are meant to bring home to the Kremlin the political and financial cost of their aggression in Ukraine,” Wright said. “Making that happen is a moral imperative and that must be our priority.”
The Foreign Secretary also announced a raft of sanctions, many of which hit actors and organisations from mainstream media organisations with asset freezes and travel bans, to hit those behind Putin’s vicious online disinformation campaign, after UK-funded research exposed the Kremlin’s shadowy troll factory tactics.
The 63 new sanctions are bolstered by new legislation now in force, which means social media, internet services and app store companies must take action to block content from two of Russia’s major sources of disinformation, RT and Sputnik.
View the full UK sanctions list.
Read our other article on Russia sanctions: reputational risk cannot be overstated
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