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"Car exiting Moscow. Any transactional lawyers want to jump in?"


The government has banned UK law firms from handling transactional work for Russian clients, in a new round of sanctions.

The Foreign Office announced that under the fresh sanctions Russia will "lose access to major western services" including "transactional legal advisory services."

The statement said that: "Russia is highly dependent on Western countries for legal services with 85% of all legal services being imported from G7 countries" and "the UK accounts for 59% of these imports".

The government is set to flesh out the details over the coming weeks, as to what precisely will be caught, but outlined: "the new legal advisory measures will cover certain commercial and transactional services and hamper Russia's businesses' ability to operate internationally".

The new sanctions also block Russian access to IT consultancy, architectural, engineering, advertising and auditing services.

James Cleverly, the new Foreign Secretary, said that the latest sanctions were "in response to Russia declaring the illegal annexation of 4 regions of Ukraine," and that the UK would "never recognise the results of these sham referendums."

The widening of sanctions to including transactional legal work, is a change in tack from the government's position in May. Back then, Liz Truss (Foreign Secretary at the time), outlined service exports that would be covered by sanctions, which did not include legal services. The justice minister at the time, James Cartlidge, said that legal services had been carved out of sanctions, as they were "distinct from other services in the roles they play in supporting a flourishing democracy and upholding the rule of law" and that "access to legal professionals is considered a fundamental right in democratic societies."

And some critics have argued that law firms should not drop Russian clients. In a statement in March, Law Society president I. Stephanie Boyce said, "It’s the job of solicitors to represent their clients, whoever they may be, so that the courts act fairly".

The Law Society has now signalled issues with the latest government sanctions. A spokesperson for the Law Society told RollOnFriday: “Law firms withdrew from the Russian market at pace following the invasion. Any UK government proposals should be delivered in lockstep with international partners such as the US and EU. It is important that firms are able to continue to give advice to those looking to divest from the Russian market.” 

Earlier this year, although the vast majority of UK law firms announced that they were leaving Moscow in response to the war, Mishcon de Reya was one firm to defend its decision to stay in Russia. A Mishcon spokesperson said at the time that it would "continue to act for Russian clients who are not affected by sanctions in accordance with our regulatory obligations and ethical values, and also because we have not, nor ever will, discriminate based on nationality or anything else, some of our Russian clients are themselves the target of President Putin's government".

Mishcon did not respond to requests for comment on the latest round of government sanctions. 

Withers, which offers expertise for Russian work on its website, said in response to the latest sanctions: "We continue to be appalled by events in Ukraine. We won't act in any way which assists the current Russian government regime and obviously comply with all sanctions." 

Other firms have also made their sympathies with Ukraine clear. For example, this week Sidley Austin is launching a photography exhibition taken by leading photojournalists "covering the humanitarian crisis during the ongoing Russia-Ukraine war," in support of RE:ACT, a disaster response charity.

Thomas Thesing, the firm's Managing Partner said: "Images can capture a thousand words and give voices to those who have been silenced throughout the conflict." He said the exhibition "showcases some of the most striking images captured throughout the conflict," and that the firm was delighted to support RE:ACT in its humanitarian work.

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Comments

John West 07 October 22 10:44

We continue to be appalled by events in Ukraine but we just can't help ourselves when it comes to money,

I hate WFH, I hate the office, I hate law 07 October 22 14:22

Mishcon's coms team - it must have taken a lot of balls or brass kneck to give that 'of course'. 

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