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YAROSLAV KULIK
PARTNER, ART DE LEX LAW FIRM
CHAIR, GOVERNMENT PROCUREMENT SUBCOMMITTEE
WASHINGTON D.C., 19 SEPTEMBER 2016
NAVIGATING SANCTIONS IN
A CHANGING WORLD: RUSSIAN VIEW
ANNUAL CONFERENCE OF THE INTERNATIONAL BAR ASSOCIATION
EXPERIENCE OF RUSSIAN LAW
FIRMS IN COUNSELING ON
SANCTIONS MATTERS
PRESENTATION OF SURVEY RESULTS CONDUCTED BY A PRESENTER
AMONG THE RUSSIAN LAW FIRMS IN SEPTEMBER 2016
22
2
DID RUSSIAN LAW FIRMS ESTABLISH
SPECIAL DIVISIONS DEALING WITH
SANCTIONS MATTERS?
3
50 50
Yes No
NOTE: Hereinafter percentage among firms who advise on sanctions matters
50
2
INDUSTRY SECTORS OF ADVISING (1)
OIL AND GAS
BANKING AND FINANCE
MACHINERY PRODUCTION
AIRCRAFT CONSTRUCTION
TELECOMMUNICATIONS
DEFENSE INDUSTRY
4
2
INDUSTRY SECTORS OF ADVISING (2)
LOGISTICS
FOOD INDUSTRY
CONSTRUCTION
MEDICAL DEVICES AND EQUIPMENT
MICROELECTRONICS
PUBLIC PROCUREMENTS
5
2
DO RUSSIAN LAW FIRMS CONDUCT
COURT OR ARBITRATION CASES?
6
20
80
Yes No
80
2
TYPICAL COURT OR ARBITRATION CASES
INVOLVING SANCTIONS-RELATED MATTERS
7
DISPUTES BETWEEN RUSSIAN
BANKS AND THEIR CLIENTS ARISING
OUT OF PERFORMANCE (NON-
PERFORMANCE) OF A BANK
ACCOUNT AGREEMENT
CONTRACTUAL DISPUTES ARISING
OUT OF NON-PERFORMANCE OF
OBLIGATIONS DUE TO SANCTIONS
(TERMINATION OF CONTRACTS,
PENALTIES AND DAMAGES
RECOVERY, ETC.)
2
SANCTIONS AS A FORCE-MAJEURE
IN PRACTICE OF RUSSIAN COURTS
WORKS
DOESNT
WORK
8
IF SANCTIONS ARE
MENTIONED IN FORCE-
MAJEURE CLAUSE
IF CONTRACT DOES NOT
CONTAIN CLAUSES RELATED
TO SANCTIONS
NOTE: A CERTIFICATE ISSUED BY A CHAMBER OF
COMMERCE AND INDUSTRY MAY BE REQUIRED TO
PROVE THE FORCE-MAJEURE EVENT
2
SANCTIONS-RELATED REPS, WARRANTIES
AND INDEMNITIES UNDER RUSSIAN LAW
SINCE 1 JUNE 2015 THE CIVIL CODE
ALLOWS PARTIES TO USE IN CONTRACTS
LEGAL INSTRUMENTS SIMILAR TO
REPRESENTATIONS, WARRANTIES AND
INDEMNITIES IN COMMON LAW
9
2
DO RUSSIAN LAW FIRMS ADVISE ON
TRANSACTIONS ASSOCIATED WITH
SANCTIONS MATTERS?
10
90
10
Yes No
90
2
TYPES OF TRANSACTIONS (1)
ESTABLISHING JOINT VENTURES WITH FOREIGN PARTNERS
ACQUISITIONS OF SHARES/INTEREST IN SHARE CAPITAL
PLACEMENT OF SECURITIES DENOMINATED IN USD OR EUR
ATTRACTING FINANCING FROM US OR EU
11
2
TYPES OF TRANSACTIONS (2)
SUPPLY OF GOODS
FIELDS DEVELOPMENT
CONSTRUCTION INVESTMENT AGREEMENTS
DOING BUSINESS IN CRIMEA
12
2
SIEMENS TURBINES STORY: SUPPLY TO A
THIRD PARTY ON NEUTRAL TERRITORY
13
vs
A JV OF SIEMENS AND POWER MACHINES TO
SUPPLY TURBINES TO A POWER PLANT ON
RUSSIAS TAMAN PENINSULA. THERE MAY BE
SOME DOUBTS ABOUT AWARENESS OF SIEMENS
WITH RESPECT TO THE FINAL DESTINATION OF
TURBINES. WHAT ARE THE RISKS FOR SIEMENS TO
BREACH THE EU SANCTIONS?
?
2
DO RUSSIAN LAW FIRMS ADVISE ON
DEVELOPING COMPLIANCE PROGRAMS?
14
20
80
Yes No
80
2
HOW CAN YOU DESCRIBE THE CURRENT
SITUATION FOR YOUR RUSSIAN CLIENTS?
1
 CLIENTS CREATE SCHEMES BASED ON USING COMPANIES NON-AFFILIATED WITH
SANCTIONED ENTITY OR ENTITIES
2
 SANCTIONS SIGNIFICANTLY COMPLICATE DOING BUSINESS FOR CLIENTS
3
 CLIENTS FOCUS ON DOMESTIC MARKET (INCLUDING IMPORTS PHASE OUT) AND
PARTNERS FROM COUNTRIES WHO DID NOT IMPOSE SANCTIONS
4
 BIG COMPANIES CAUGHT THE MOMENT AND HAVE SUCCESSFULLY RESTRUCTURED
CONTRACTS AND TRANSACTIONS. SMALL COMPANIES FACE CONFLICT SITUATIONS
5
 CLIENTS LOOK FOR NEW FORUMS FOR DISPUTE RESOLUTION (E.G. IN HON-KONG)
6
 BIG TURN TO THE EAST HAS NOT YET TOOK PLACE
15
THANK YOU FOR YOUR ATTENTION!
kulik@artdelex.ru
+7 (495) 937-71-23
WE THANK ALRUD, FBK LEGAL, KIAP, LIDINGS, LINIYA PRAVA,
MURANOV, CHERNYAKOV & PARTNERS, NEKTOROV, SAVELIEV &
PARTNERS, PEN & PAPER, YUST, AND OTHER RUSSIAN LAW
FIRMS FOR PARTICIPATING IN OUR SURVEY

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IBA2016 Washington Navigating sanctions Kulik

  • 1. YAROSLAV KULIK PARTNER, ART DE LEX LAW FIRM CHAIR, GOVERNMENT PROCUREMENT SUBCOMMITTEE WASHINGTON D.C., 19 SEPTEMBER 2016 NAVIGATING SANCTIONS IN A CHANGING WORLD: RUSSIAN VIEW ANNUAL CONFERENCE OF THE INTERNATIONAL BAR ASSOCIATION
  • 2. EXPERIENCE OF RUSSIAN LAW FIRMS IN COUNSELING ON SANCTIONS MATTERS PRESENTATION OF SURVEY RESULTS CONDUCTED BY A PRESENTER AMONG THE RUSSIAN LAW FIRMS IN SEPTEMBER 2016 22
  • 3. 2 DID RUSSIAN LAW FIRMS ESTABLISH SPECIAL DIVISIONS DEALING WITH SANCTIONS MATTERS? 3 50 50 Yes No NOTE: Hereinafter percentage among firms who advise on sanctions matters 50
  • 4. 2 INDUSTRY SECTORS OF ADVISING (1) OIL AND GAS BANKING AND FINANCE MACHINERY PRODUCTION AIRCRAFT CONSTRUCTION TELECOMMUNICATIONS DEFENSE INDUSTRY 4
  • 5. 2 INDUSTRY SECTORS OF ADVISING (2) LOGISTICS FOOD INDUSTRY CONSTRUCTION MEDICAL DEVICES AND EQUIPMENT MICROELECTRONICS PUBLIC PROCUREMENTS 5
  • 6. 2 DO RUSSIAN LAW FIRMS CONDUCT COURT OR ARBITRATION CASES? 6 20 80 Yes No 80
  • 7. 2 TYPICAL COURT OR ARBITRATION CASES INVOLVING SANCTIONS-RELATED MATTERS 7 DISPUTES BETWEEN RUSSIAN BANKS AND THEIR CLIENTS ARISING OUT OF PERFORMANCE (NON- PERFORMANCE) OF A BANK ACCOUNT AGREEMENT CONTRACTUAL DISPUTES ARISING OUT OF NON-PERFORMANCE OF OBLIGATIONS DUE TO SANCTIONS (TERMINATION OF CONTRACTS, PENALTIES AND DAMAGES RECOVERY, ETC.)
  • 8. 2 SANCTIONS AS A FORCE-MAJEURE IN PRACTICE OF RUSSIAN COURTS WORKS DOESNT WORK 8 IF SANCTIONS ARE MENTIONED IN FORCE- MAJEURE CLAUSE IF CONTRACT DOES NOT CONTAIN CLAUSES RELATED TO SANCTIONS NOTE: A CERTIFICATE ISSUED BY A CHAMBER OF COMMERCE AND INDUSTRY MAY BE REQUIRED TO PROVE THE FORCE-MAJEURE EVENT
  • 9. 2 SANCTIONS-RELATED REPS, WARRANTIES AND INDEMNITIES UNDER RUSSIAN LAW SINCE 1 JUNE 2015 THE CIVIL CODE ALLOWS PARTIES TO USE IN CONTRACTS LEGAL INSTRUMENTS SIMILAR TO REPRESENTATIONS, WARRANTIES AND INDEMNITIES IN COMMON LAW 9
  • 10. 2 DO RUSSIAN LAW FIRMS ADVISE ON TRANSACTIONS ASSOCIATED WITH SANCTIONS MATTERS? 10 90 10 Yes No 90
  • 11. 2 TYPES OF TRANSACTIONS (1) ESTABLISHING JOINT VENTURES WITH FOREIGN PARTNERS ACQUISITIONS OF SHARES/INTEREST IN SHARE CAPITAL PLACEMENT OF SECURITIES DENOMINATED IN USD OR EUR ATTRACTING FINANCING FROM US OR EU 11
  • 12. 2 TYPES OF TRANSACTIONS (2) SUPPLY OF GOODS FIELDS DEVELOPMENT CONSTRUCTION INVESTMENT AGREEMENTS DOING BUSINESS IN CRIMEA 12
  • 13. 2 SIEMENS TURBINES STORY: SUPPLY TO A THIRD PARTY ON NEUTRAL TERRITORY 13 vs A JV OF SIEMENS AND POWER MACHINES TO SUPPLY TURBINES TO A POWER PLANT ON RUSSIAS TAMAN PENINSULA. THERE MAY BE SOME DOUBTS ABOUT AWARENESS OF SIEMENS WITH RESPECT TO THE FINAL DESTINATION OF TURBINES. WHAT ARE THE RISKS FOR SIEMENS TO BREACH THE EU SANCTIONS? ?
  • 14. 2 DO RUSSIAN LAW FIRMS ADVISE ON DEVELOPING COMPLIANCE PROGRAMS? 14 20 80 Yes No 80
  • 15. 2 HOW CAN YOU DESCRIBE THE CURRENT SITUATION FOR YOUR RUSSIAN CLIENTS? 1 CLIENTS CREATE SCHEMES BASED ON USING COMPANIES NON-AFFILIATED WITH SANCTIONED ENTITY OR ENTITIES 2 SANCTIONS SIGNIFICANTLY COMPLICATE DOING BUSINESS FOR CLIENTS 3 CLIENTS FOCUS ON DOMESTIC MARKET (INCLUDING IMPORTS PHASE OUT) AND PARTNERS FROM COUNTRIES WHO DID NOT IMPOSE SANCTIONS 4 BIG COMPANIES CAUGHT THE MOMENT AND HAVE SUCCESSFULLY RESTRUCTURED CONTRACTS AND TRANSACTIONS. SMALL COMPANIES FACE CONFLICT SITUATIONS 5 CLIENTS LOOK FOR NEW FORUMS FOR DISPUTE RESOLUTION (E.G. IN HON-KONG) 6 BIG TURN TO THE EAST HAS NOT YET TOOK PLACE 15
  • 16. THANK YOU FOR YOUR ATTENTION! kulik@artdelex.ru +7 (495) 937-71-23 WE THANK ALRUD, FBK LEGAL, KIAP, LIDINGS, LINIYA PRAVA, MURANOV, CHERNYAKOV & PARTNERS, NEKTOROV, SAVELIEV & PARTNERS, PEN & PAPER, YUST, AND OTHER RUSSIAN LAW FIRMS FOR PARTICIPATING IN OUR SURVEY

Editor's Notes

  • #14: Will the defense on demonstration that Siemens had no reasonable cause to suspect that its actions would infringe sanctions work?