Hong Kong Companies Should Closely Scrutinize Russia Ties to Avoid Penalties, Law Firm Says
Companies operating in Hong Kong should carefully monitor their transactions to make sure they’re not exposing themselves to Russia-related trade restrictions, which could lead to secondary sanctions, said Hong Kong-based law firm King & Wood. The recent string of international sanctions is “unprecedented” and effects are being felt “by businesses worldwide, including those in jurisdictions such as Hong Kong which has not issued any unilateral sanctions,” the firm said in an April 8 alert.
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Companies in Hong Kong should be identifying whether they have any Russian nexus through their clients, counterparties and supply chains and should consider “contractual terms and conditions for exit options” in cases where a “Russian nexus presents a risk outside of your risk appetite.”
The firm expects to see “further waves” of sanctions against Russia and Russian entities along with “further retaliation and countersanctions” by Russia. The alert includes a detailed breakdown of the global Russia sanctions currently in place, compliance questions companies should consider and available exemptions.