Sanctions updates/8 Aug 2014

SANCTIONS UPDATE – Russia has introduced a ban on the import of certain goods

Russia has introduced a ban on the import of certain goods from the United States of America, the EU states, Canada, Australia, and Norway.

The Russian authorities are trying to address numerous questions from those importing goods into Russia, such as whether the actual import or the customs release of goods is prohibited. Early next week the Russian customs authorities plan to clarify the procedure and the specifics of the practical implementation of the ban. Importantly, the intention is to interpret the restrictions strictly. Those who had informed the Russian customs of the prospective import by 6 p.m. on 7 August are permitted to import.

Under the current circumstances, some of the alternatives to consider are:

  • Localization of manufacturing operations into Russia and distribution of profits from the Russian market as dividends;
  • Establishing production in Belarus and Kazakhstan and then distributing the goods in Russia without customs formalities utilizing the Customs Union’s benefits;
  • Localization of the final goods made of foreign materials in Belarus or Kazakhstan;
  • Establishing production in Russia and then increasing the market share by adding Belarus and Kazakhstan and
  • Using local materials for Customs Union production, thus saving on customs payments.

Moreover, if you have a trade mark registered/protected in Russia, you may consider expanding its use in Russia including possible licensing arrangements and payment of royalties.

The sanctions are likely to raise contractual, logistical and insurance questions for various parties involved.

Share on LinkedInTweet about this on TwitterShare on Facebook