Effects of Russia Sanctions Start to Kick In

Consequences of economic sanctions imposed by the European Union against Russian companies and officials have started to kick in. 

Namely, one of Finnish banks revealed its intention to close an account owned by Russian defence company United Shipbuilding Corporation (USC). The move might hamper money transfer to Archtech Helsinki Shipyard, a joint venture of USC and STX, according to Aleksei Rakhmanov, USC President, cited by Russian news agency ITAR-TASS.

Rakhmanov said that USC has already opened accounts in other banks.

“As for the currency, we leave the contracts denominated in dollars, pay them in euro or other alternative currency acceptable for the customer,” Rakhmanov said, adding that other operations of the company have not been affected by the sanctions.

As explained, in terms of demand, there are still clients “eager to cooperate with USC”, those being the former Soviet republics and the Asia-Pacific Region partners like India, Vietnam and China, along with countries that are  against the sanctions like those in Latin America.

Speaking of the potential impact of the second wave of sanctions on the company0s deepwater drilling and the Arctic zone development, Rakhmanov noted that there were  no problems to hinder their implementation.

The latest batch of sanctions, published in the EU Official Journal, banned debt financing for three Russian companies – Rosneft, Transneft and Gazprom Neft.

The EU has also banned debt financing for Russia’s three major defense manufacturers – UralVagonZavod (UVZ), Oboronprom and United Aircraft Corporation (UAC).

Nine defence companies have also been struck by the sanctions.

Supplies of European dual-purpose technologies are banned for: the Sirius Concern, Stankoinstrument, Khimkompozit, the Kalashnikov Concern, the Tula Arms Plant, Technologii Mashinostroyeniya, Vysokotochnye Kompleksy, the Almaz-Antei Concern, and Bazalt.