FTI Consulting’s International Trade experts from the UK, US and EU share their analysis of the implications of the conflict for international trade relationships and the business community.
Whilst it is of no surprise that Russia’s invasion of Ukraine currently dominates global news cycles, no recent conflict has ever impacted the global financial and business agenda so significantly as this current war. New international economic sanctions levied against Russia (and Belarus) on an unprecedented scale caught many multinationals by surprise. Russia’s invasion of Ukraine has forced US, EU ad UK leaders to fundamentally rethink post-WW2 international security doctrines with direct consequences for business and globalisation.
Despite the recent years of volatile diplomatic, financial, and international trade relations between the EU, US, and UK, these core G7 members have ostensibly formed their own pro-sanction bloc against Russia. This aims to raise economic costs for the Kremlin and isolate the country from global financial markets. The targets of these economic sanctions have included the Central Bank of Russia, the Russian National Wealth Fund, and the Ministry of Finance of the Russian Federation to ensure that a considerable percentage of Russia’s $630 billion in foreign exchange reserves remains frozen. Furthermore, sanctions have prohibited seven of the largest banks in Russia from participating in the SWIFT messaging network, effectively denying them access to international markets and further alienating Russia from the global financial system. A significant number of multinational companies with interests in Russia (Belarus and Ukraine) have now abandoned their operations despite decades of investment in the region.
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Authors: James Manning (UK), Brian Papp (US), Danesh Kermabon-Haq (US) with contributions from Josh Cameron & Ollie Welch (UK) and John Clancy & Arne Koeppel (EU).