SANCTIONS HURT BOTH SIDES
Following the Russian invasion of Ukraine on 24 February, Western allies set about imposing the harshest economic and technology sanctions on the former USSR. The United States, UK, EU, Japan, Canada, Taiwan, and New Zealand initially imposed sanctions targeting banks, oil refineries and military exports. UK Prime Minister, Boris Johnson, said on the day of the attack:
“Putin will stand condemned in the eyes of the world and of history: he will never be able to cleanse the blood of Ukraine from his hands.”
Since then, the West has further tightened its grip on Russia, imposing sanctions on dual-use goods, luxury products, oil and gas, and removing some Russian banks from Swift, the international financial messaging platform. Putin, Russian ministers, and oligarchs have also had their international assets frozen. The sanctions have not only rocked Russia’s economy but have also negatively impacted Europe, now dealing with spirally energy and commodity prices, and skyrocketing inflation.
500 COMPANIES OUT OF RUSSIA
Yale School of Management has reported that almost 500 global companies have exited Russia – to some extent. This table provides a summary of its findings:
|Extent of Exit
|Accenture, Asda, BP, eBay, Exxon, KPMG, Netflix, Uber
|Adobe, Amazon, Apple, Cisco, IBM, LVMH, McDonald’s, Microsoft, Meta, PayPal
|BNP Paribas, GE, Kellogg, Pepsi
|Holding Off New Investments
|AstraZeneca, Colgate, GSK, Kraft, Siemens, Unilever
|Acer, Alibaba, Cloudflare, Huawei, Lenovo, Tencent
You can see that 38 companies have decided to dig in and defy demands to either exit Russia or reduce activities in the country. Here is Yale’s complete list of companies.
TECHNOLOGY SANCTIONS ON RUSSIA
Most of the tech giants, major software providers and IT vendors fall into Yale’s ‘Suspension’ category and are keeping their options open for returning to Russia one day. This includes Microsoft, IBM, and SAP, the German multinational software company. Given that people can survive without a Big Mac but not without a functional IT infrastructure, these Western technology makers and others have decided to maintain some operations in Russia for humanitarian reasons. When Microsoft President, Brad Smith, was asked by Volodymyr Zelenskyy, the Ukrainian leader, to sever all ties with his country’s aggressor, Smith wrote back saying:
“Depriving these institutions of software updates and services could put at risk the health and safety of innocent civilians, including children and the elderly.”
Clients that are not subject to technology sanctions include schools, universities and hospitals.
A COMPLETE EXIT?
A handful of Microsoft, SAP and IBM employees have been angered by their company’s reluctance to completely exit Russia. They have stated that companies should go beyond ending new sales and suspend all deals with Russia. Ukraine Vice Prime Minister, Mykhailo Fedorov, is also lobbying for a complete digital departure and supports the stand taken by the Microsoft, SAP and IBM employees. He said:
“We will keep trying until those companies have made the decision to leave Russia.”
Senior management at Microsoft, IBM and SAP have all declined to comment or respond to the demands of their team.
ALWAYS ONLINE ALWAYS SECURE
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