With a vote on extending EU sanctions on Russia due by the end of the month (and expected to pass), anecdotal evidence from employees working in companies still doing business in Russia suggests the sanctions regime is much more porous than the media has reported. One of the more popular techniques of sanctions-skirting involves Russian companies forming brand new shell companies to place orders with European suppliers. The Financial Times:
A sales executive at a French company in Russia said shortly after his group informed a state-owned Russian company in February that it could not sell a piece of equipment requested by the long-standing customer, it was contacted by another Russian company about the same deal. “We had never heard about them or any of their shareholders before, but they requested exactly the same product as our previous customer, and they knew the specs and the price and who to contact,” he said. “We ran a quick check, and none of the shareholders given in the company registry is on any black list. That’s all we can do, although we can probably guess what’s going on here.”
Lawyers keep advising companies that the “ostrich defense” won’t fly in court. However, the lack of any concerted effort to enforce the law suggests that many European states are quietly buying acquiescence to the sanctions regime from their business communities by looking the other way. The sanctions are having some effect, but more as an irritant than as the crippling economic blow some hoped they would be.