Joint Crisis Center – Strategies for exiting Russia

Temporary shutdown in Russia or even a withdrawal?

Russia is currently planning various laws that will make the external management and seizure of foreign companies easier in Russia. The top item on the Russian legislator’s agenda is a law governing the external management of companies from “unfriendly” states. With this law, it is envisaged that companies of importance to Russia in which the controlling entity or proprietor directly or indirectly holds 25 percent of the voting shares and which perform “unfriendly actions” towards the Russian Federation will be placed under external management. While this does not yet constitute seizure, it is nevertheless a severe instrument. Many companies are therefore observing the current situation very closely and are analyzing their interests to weigh up whether they should pursue a temporary shutdown in Russia or even a withdrawal from the country. What do the potential approaches look like?

Urgent questions regarding exit strategies

• Which trade relationships in Russia, e.g. with distribution partners or suppliers, are affected by the war and by potential sanctions?
• Can termination rights be exercised on the basis of force majeure events?
• Is it necessary to make changes in supply chains? 
• What effects will the planned legislation on the use of external management for foreign subsidiaries in Russia have?
• Does my company face the risk of seizure, external management and expropriation in Russia?
• Is my company affected by compulsory licensing in relation to patents and trademarks?
• What will the consequences of Russia’s planned moratorium for the initiation of insolvency proceedings be?
• Temporary shutdown or withdrawal from Russia – what do the potential approaches look like?

How we can assist you

• Development of exit strategies in response to the current crisis.
• Analysis of the effects of a rapid withdrawal on the supply chain of your company.
• Identification of influencing factors and risks for companies in the event of a conclusive exit. 
• Preparation for divestment, e.g. identifying contractual consequences such as termination penalties, assisting with/ensuring contract-compliant behavior within the context of business partner relationships.
• Assistance with the execution of regulatory deals.
• Legal and HR assistance in structuring your withdrawal with consideration for important accounting and tax issues.
• Data segregation, storage and transfer management.
• Contract analysis solutions for extracting critical data items in the context of corporate transactions.
• Comprehensive planning and support for IT asset management.
• Tax and legal advice for a planned exit from Russia