The United Kingdom has announced a ban on doing business with Russia in a range of services sectors, including management consultancy, accountancy and public relations work.
The move, unveiled on Wednesday (4 May), extends the focus of the UK’s economic battle against the Putin regime from goods to services. Bans on both imports and exports of various categories of goods have been imposed since the Russian invasion of Ukraine began in late February.
According to a government statement, the UK currently accounts for around 10% of Russian imports in the sectors targeted.
The withdrawal of these services is seen as a move to “ratchet up economic pressure on the Kremlin to change course”, in the words of UK business secretary Kwasi Kwarteng.
Legal services not covered
A detailed list of those service sectors which are covered by the ban and those which are not has yet to be published by the London government.
However, legal services are known to be among the sectors which have not been restricted. This is thought to be because of the important role played by lawyers in helping UK companies divest from Russia.
Media reports on Wednesday also suggested that software and data storage services may also be exempt from the ban.
The initial communication made no mention of when the restrictions would come into effect – although it is understood that this may take a number of weeks to push through.
UK provides 10% of Russian imports in service sectors affected
“The new measures will mean Russia’s businesses can no longer benefit from the UK’s world class accountancy, management consultancy, and PR services, which account for 10% of Russian imports in these sectors,” the department for international trade said in a statement.
UK foreign secretary Liz Truss added: “Doing business with Putin’s regime is morally bankrupt and helps fund a war machine that is causing untold suffering across Ukraine. Cutting Russia’s access to British services will put more pressure on the Kremlin and ultimately help ensure Putin fails in Ukraine”.
Many UK-based consultancies and other service providers had already withdrawn from Russia, in the interests of reputation management.
The European Union is also planning to enact a similar ban to Russia as part of its sixth sanctions package, which is likely to be agreed by member states on Friday (7 May).