Law firm Arthur Cox has halted its work for dozens of Russian clients because of the Ukraine invasion and Allied Irish Banks has moved to cut its ties with a Dublin-based lender to Rosneft, the Kremlin-linked oil giant.
The moves come as pressure piles on global business to sever links with Russia. Energy companies BP, Shell and Exxon Mobil are leaving the market while H&M fashion, furniture chain Ikea and car group BMW are not selling there.
Arthur Cox’s Russian clients include some groups targeted by sanctions and some groups in which executives have been hit by penalties.
Among them was Rosneft International, an Irish subsidiary of the oil group, and Dublin-based Rosneft International Finance, which has Rosneft as its only borrower.
Sanctions against Rosneft chief executive Igor Sechin, a former deputy prime minister of Russia, prompted France to block his superyacht from leaving the Mediterranean port of La Ciotat, near Marseilles. BP abandoned its 19.7 per cent stake in Rosneft.
AIB, majority State-owned, and Deutsche Bank are bankers to Rosneft International Finance. Although that entity is not under sanction, AIB is understood to be taking steps to terminate the banking relationship.
There was no AIB comment on its business with Rosneft International Finance: “AIB complies with and will continue to comply with all applicable laws and obligations including in relation to international sanctions.”
Arthur Cox, one of Ireland’s largest solicitors firms, had a specific “Russian capital markets practice”, acting for more than 60 Russian borrowers. The firm’s website said a partner, Glenn Butt, has advised on more than 220 Russian deals in the last 14 years.
Clients, named on the same web page, included: lenders Alfa Bank, Credit Bank of Moscow, Sovcombank, and TCS; Russian state leasing firm GTLK; Russian Railways; potash producer Uralkali; miner Norilisk Nickel; steel and mining group Metalloinvest; chemicals company Phosagro; and steel group NLMK.
Banned
The EU has excluded Sovcombank from the Swift payments network and Alfa Bank has been banned from issuing bonds, shares or loans to refinance its operations.
“We are appalled by the horrific scenes in Ukraine and condemn the invasion of Ukraine by Russia which has prompted a review of all existing and any new Russia-related work,” Arthur Cox said in a statement.
“At this time, we have decided to both decline new instructions and cease all Russia-related work that goes against our values or existing or emerging sanctions. Though we are subject to strict client confidentiality rules and are not at liberty to comment on individual clients, we can confirm that this review has already resulted in our ceasing to act for a number of clients.”
The statement, on the ninth day of the invasion, reflects a policy change. On the first day of the attack the firm said it “has always and will continue to be guided by and comply fully with all applicable sanctions” when The Irish Times asked whether its work for the entities with Rosneft links might be reviewed.
