Connect with us

Business

Companies lawyer up to navigate Russia sanctions

Published

on

Unprecedented in their scale and speed, Western measures against Moscow have ranged from freezing assets to export bans on strategic products like semiconductors and financial sanctions
Share this:

The deployment of unprecedented sanctions against Russia over the Ukraine war has left companies with a complex legal minefield to navigate, prompting them to hire more lawyers to avoid costly missteps.

The European Union alone is inching towards its sixth sanctions package, while the United States, Britain, Japan and even traditionally neutral Switzerland have imposed restrictions on trade with Russia.

Unprecedented in their scale and speed, Western measures against Moscow have ranged from freezing assets to export bans on strategic products like semiconductors and financial sanctions.

Alex Zuck, managing director for product strategy at Moody’s Analytics, said the company in recent weeks had spoken to “hundreds” of compliance executives “struggling with and thinking about the sanctions exposure”.

Some companies have to expand their legal teams in response to the ever-shifting landscape, said a source in the European banking industry.

“There is a layer of complexity exacerbated by the fact that we get new sets of sanctions almost every week,” the source said.

Conforming to the sanctions is even tougher because Russia had been closely integrated into the world economy and was seen as a promising market by many Western businesses.

Those firms are now on a legal “war footing”, said Elodie Valette, a lawyer at Bryan Cave Leighton Paisner, which aids companies in the car manufacturing and energy industries, among others.

“They set up teams which sometimes manage almost only that because, for some, their daily activity was put in a difficult position,” she told AFP.

Suddenly inundated with work, lawyers scrambled to examine the sanctions, categorise them by activity and invite clients to make audits as they found themselves “a little lost” at the start, she added.

“Now the companies are starting to see how they can strengthen their programme for the future,” said Zuck.

“I don’t believe many people think there will be an abrupt end to the sanctions — they are going to last, probably increase.” 

– Tricky task –

The call to economic arms began with the outbreak of war in late February, with the first measures obliging companies to compile an inventory of their Russian partners.

Business relations have to be scrutinised individually and painstakingly, including a review of clients, providers and partners, to see who really lies behind Russian structures.

“You need to go to the IT systems and conduct investigations. Having a name is just the tip of the iceberg, you need to find all the connections and the links,” the banking source said.

Zuck said the task is tricky as the United States and the European Union, for example, have different definitions of the level of control a Russian entity needs to have to trigger sanctions.

The manual approach of asking counterparties to disclose beneficial owners is sometimes “very difficult” due to the opacity of many Russian structures, he added.

“I dont believe many people think there will be an abrupt end to the sanctions. They are going to last, probably increase,” Zuck said.

Banks, especially those with close financial relations with Russia and countries on friendly terms with the Kremlin, are on the frontline of the economic war.

Despite some divergences between US, EU and UK sanctions regimes, the political objectives are the same and banks with the biggest exposure to Russia must reinforce their compliance teams, said the European banking industry source.

Violating sanctions can cost companies dearly. In 2014, the United States ordered French bank BNP Paribas to pay almost $9 billion for violating US embargoes against Iran, Cuba and Sudan.

“Today, everyone wants to apply the sanctions strictly,” said Valette.

Share this:

Business

Climate: Africa’s energy future on a knife’s edge

Published

on

By

Sun-rich Namibia is seeking funds for plans to become a green-energy giant. Solar farms would harvest hydrogen from water via electrolysis -- the gas would then be liquefied and exported
Share this:

With more than half its population lacking mains electricity and still using charcoal and other damaging sources for cooking, Africa’s energy future –- torn between fossil fuels and renewables — is up for grabs.

As nations discuss the climate crisis at the UN’s mid-year negotiations in Bonn, AFP spoke to Mohamed Adow, founder of think tank Power Shift Africa, about the forces pulling the continent in opposing directions. 

The stakes, he warns, are global.

Q. You have said rich nations owe the rest of the world a climate debt

“The prosperity they enjoy was, in effect, subsidised by the rest of the world because they polluted without paying the cost for doing so.

“Africa is home to 17 percent of Earth’s population but accounts for less than four percent of global greenhouse-gas emissions and only half-a-percent of historic emissions. The continent emits less than 1 tonne of CO2 per person, compared to seven in Europe or China, and more than 15 in the United States.

“If the least-developed continent on our planet is going to leapfrog fossil fuels to renewables, rich nations must pay the climate debt they owe.”

Q. How will Africa’s energy choices impact the rest of the world?

“My continent is at a crossroads with two possible futures. Africa can become a clean energy leader with decentralised renewables powering a more inclusive society and a greener economy, or it can become a large polluter that is burdened with stranded assets and economic instability. 

“We have the opportunity to make a difference for Africa and for the world.”

Q. US envoy John Kerry says climate change in Africa could see “hundreds of millions of people looking for a place to live.” Is he right?

“Absolutely. It is important to acknowledge that climate-induced migration is a threat. As climate impacts increase, people in Africa — where almost all agriculture is rain-fed — will be forcefully displaced from their land. 

“In wealthy nations, that is seen mostly as a security issue. But this is a humanitarian disaster in which people are already losing lives, homes and livelihoods.

“The only way to prevent climate-induced migration in the long-run is to reduce carbon pollution at the scale needed.”

Q. Is the war in Ukraine affecting energy development in Africa?

“To attain energy security after Russia’s invasion, Europe is effectively pushing Africa to pour its limited financial resources into developing its fossil gas extraction and export industry, primarily for consumers in Europe.”

“Last month German Chancellor Olaf Scholz, during a three-day tour of Senegal, said his country wants to ‘intensively pursue’ projects to develop and import Senegal’s huge gas reserves. Germany, of course, has been especially dependent on Russian gas.

“So now Europe wants to shackle Africa with new fossil fuel infrastructure that we know will be redundant within a few years, not to mention self-harming for the continent. And lest we forget: gas from Africa will emit the same amount of emissions as gas from Russia.”

Q. What is the balance of power in Africa between fossil-fuel interests and those striving to leapfrog to renewables?

“Last month, the Sustainable Energy for All summit in (Rwandan capital) Kigali issued a communique supporting ‘Africa in the deployment of gas as a transition fuel’.  But only 10 out of 54 African countries signed that statement. 

“I think the majority of African nations recognise the tremendous opportunity that renewables present for job creation, innovation, reduced air pollution and sustainable industrialisation. But this majority is a silent majority — they have not yet leveraged their moral voice to make a case for a cleaner, sustainable Africa.

“There are some leaders. My country, Kenya, is currently powered by 90-percent renewable energy and has set a target of 100 percent by 2030.”

Q. The trillions needed to engineer a rapid transition to renewables will not come from public sources alone. How do you mobilise private capital?

“We need to think about long-term investment security in Africa. This is the most expensive continent for securing loans or credit. We need to introduce payment guarantee schemes that are backed by international finance to facilitate safe investment in renewable energy.

“But you still need public money to leverage international investment and finance. We also have to unlock Africa’s domestic sources — public funds, sovereign wealth funds. And then there’s debt. If we could swap some foreign debt for the kinds of investment Africa needs, it could make a big difference.”

Share this:
Continue Reading

Business

Italy’s Pompeii tests new guard dog — a robot named Spot

Published

on

By

Spot's current mission at Pompeii is to monitor hard-to-access areas of the sprawling ruins
Share this:

Under the amused gaze of many tourists, a robot dog wanders the ancient stone alleys of Pompeii’s famous archaeological park.

Meet Spot, a friendly, yellow-and-black remote-controlled creature with a gangly gait who looks like a dog crossed with an insect — all wrapped up in a robot’s body. 

Spot’s current mission at Pompeii is to inspect hard-to-access areas of the sprawling ruins, to collect data and alert his handlers to safety and structural problems. 

“Particularly underground structures where safety conditions won’t allow (staff) to enter, such as in the park’s many very narrow and dangerous tunnels,” Pompeii’s general director, Gabriel Zuchtriegel, told AFP. 

His purvey includes surveying tunnels dug out in clandestine excavations, which Zuchtriegel said “unfortunately still take place in the area”. 

With its excavated ruins spread out over 44 hectares (109 acres), the archaeological site preserves the remains of the ancient wealthy city south of Naples, buried by ash after the eruption of nearby Mount Vesuvius in 79 AD. 

Spot — who weighs 70 kilograms (154 pounds) and is about the size of a Golden Retriever — is controlled remotely with a tablet and better equipped than people to survey certain areas of the park.  

The robot is made by US company Boston Dynamics, which specialises in robotics, including for the military. The company’s website says Spot can be used in industries such as construction, mining and manufacturing, among others, carrying out inspections and capturing data.   

Controlling Spot this week in Pompeii was Valerio Brunelli, business developer for Leica Geosystem, which makes a 3D flying scanner, resembling a drone, that accompanies the robot in its rounds.

Brunelli made Spot bow and wiggle for the crowd.

“Spot is an amalgamation of technology that makes it a robot capable of exploring very complicated places, such as those found here,” said Brunelli.

“It’s a leap into the future for a thousand-year-old park”.

The robot is being used on a trial basis and comes with a $75,000 price tag.

Director Zuchtriegel said a decision on whether or not to buy Spot had not yet been made, but that rapid changes in the technology sector made choosing expensive, high-tech purchases difficult. 

“People are always needed, so there will never be a robot dog to be the guardian inside the Pompeii site. That is not the goal.” 

Share this:
Continue Reading

Business

US inflation skyrockets, prolonging pain for consumers

Published

on

By

US President Joe Biden is struggling to help ease surging prices hurting American familes and damaging his popularity
Share this:

US inflation resurged in May, defying hopes price pressures would slow, and posting the largest increase since December 1981 as Americans continue to shell out ever more for food and gas, according to data released Friday.

Consumer prices in the world’s largest economy have soared by the fastest pace in more than four decades, with gas prices at the pump hitting new records daily amid the fallout from Russia’s invasion of Ukraine as well as ongoing supply chain challenges due to the Covid-19 pandemic.

US President Joe Biden, whose popularity has taken a hit as prices surge, has made fighting inflation his top domestic priority, but is finding he has few tools to directly impact prices.

Biden has tried to hammer home his optimistic message about the economic progress in the wake of the pandemic, including rapid GDP growth and record job creation, while pressing Congress to take action to lower costs on specific products.

But the latest inflation data dealt a crushing blow, as the consumer price index (CPI) jumped 8.6 percent compared to May 2021, up from 8.3 percent in the 12 months ending in April and topping what most economists thought was the peak of 8.5 percent in March.

Prices continued to rise last month for a range of goods, including housing, groceries, airline fares and used and new vehicles, with annual gains setting new records in multiple categories, according to the Labor Department report.

“The headline inflation numbers are dreadful. Strip away some special factors & they’re merely bad,” Harvard economist and former White House advisor Jason Furman said on Twitter.

Some economists expected the easing of pandemic restrictions to cause shift of US consumer demand towards services and away from goods, which they said would ease inflation pressures, but prices for services increased as well.

“This report tells a pessimistic story of a broader rise in prices, and the shift in price pressures from goods (which reflects many pandemic-related pressures) to services (where inflation was yet to really emerge),” said Justin Wolfers, an economics professor at the University of Michigan, on Twitter.

– Soaring energy –

CPI rose one percent compared to April, after the modest 0.3 percent gain in the prior month, the Labor Department reported, far higher than expected by analysts who were looking for inflation pressures to ebb slightly.

Energy has soared 34.6 percent over the past year, the fastest since September 2005, while food jumped 10.1 percent — the first increase of more than 10 percent since March 1981, the report said.

Fuel oil in particular more than doubled, jumping 106.7 percent, the largest increase in the history of CPI, which dates to 1935, according to the report.

Food and fuel prices have accelerated in recent weeks since the Russian invasion of Ukraine sent global oil and grain prices up, and American drivers are facing daily record gas prices, with the national average hitting $4.99 a gallon on Friday, according to AAA.

The United States has come roaring back from the economic damage inflicted by the Covid-19 pandemic, helped by bargain borrowing costs and massive government stimulus measures.

But with the pandemic still gripping other parts of the world, global supply chain snarls have caused demand to far outstrip resources. Meanwhile, the conflict in Ukraine has sent global oil prices above $100 a barrel.

The Federal Reserve has begun raising interest rates aggressively, with another big hike expected next week, as policymakers attempt to combat inflationary pressures without triggering a recession.

“This report kills any last vestiges of hope that the Fed could pivot to 25bp in July,” said Ian Shepherdson of Pantheon Economics, referring to a quarter-point rate hike. “But we remain hopeful” to see such a shift in September.

Share this:
Continue Reading

Featured