Posts Tagged ‘Ukraine’

h1

Russia-Ukraine War: Perspectives U.S. Exporters Need to Know

June 22, 2022

Evan Johnson and Agnes Pawelkowska are international trade specialists at the International Trade Administration’s Office of Russia, Ukraine, and Eurasia.

This post contains external links. Please review our external linking policy.

Russia’s latest unprovoked attack on Ukraine, and the Western sanctions that have followed, have had profound impacts on the global economy and forced businesses operating in Russia to re-think their way forward. Although numerous U.S. companies have successfully operated in Russia for many years, many are deciding to either withdraw from the market or suspend their operations in Russia, regardless of the significant economic losses incurred.

In a series of market intelligence pieces, we’ll try to address some of the pressing questions, offer insights, and share updates on how the International Trade Administration and its U.S. and Foreign Commercial Service are working to support U.S. exporters as they navigate these complex considerations.

What is the current economic situation and is it sustainable to do business in Russia since its invasion of Ukraine?

The United States first levied sanctions after Russia first invaded Ukraine in 2014, seizing Crimea and supporting separatists in Ukraine’s eastern Luhansk and Donetsk regions.  During the 2014-2021 period, most businesses outside of a few targeted sectors were able to adjust over time. However, the new international sanctions adopted beginning in February 2022 have been much more swift, severe, and comprehensive, forcing companies to reconsider their business operations in the Russian market. Payment transactions, letters-of-credit, insurance, foreign exchange operations, profit repatriation, new investment, international travel and staffing, and logistics all have become much more complicated. In light of these developments, U.S. companies with regional headquarters in Moscow have had to consider alternative arrangements to sustain their presence in the broader Eurasia region. Although some companies have chosen to stay in Russia while temporarily suspending operations, others have found that the already challenging business environment in Russia has become increasingly unstable and unpredictable virtually overnight. Complicating matters further, Russia has threatened Western companies with retaliatory measures, including proposals to seize the assets of Western companies that decide to leave Russia.

Close up of Central Asia on a colorful world map.

What are U.S. companies doing?

As it becomes increasingly difficult to conduct and plan business in Russia, there are a number of relocation alternatives and alternative markets to consider for companies who would like to sustain their presence in the Eurasia region. Some Russian citizens and businesses have already started to move to Central Asia and the Caucasus. Multilateral development banking institutions have shown renewed interest in supporting regional renewable energy, infrastructure, and agricultural projects.

U.S. companies rethinking investment positions in Russia may want to consider industries ripe for growth in Central Asia. Kazakhstan and Uzbekistan are currently courting U.S. companies in the extractive industries, and firms able to supply the engineering, mining, oil and gas, construction, and infrastructure sectors have good opportunities to expand their presence in the region. These nations not only possess an abundance of natural resources, but both countries are touting their political and economic reforms as selling points that could appeal to U.S. companies looking to shore up footholds in a region made difficult by the sanctions and export controls imposed against Russia.

Opportunities are also ripe for U.S. exporters in agriculture/agribusiness, environmental technology and healthcare sectors.

How is the U.S. government able to help?

Whether U.S. companies are looking to understand the complexities of sanctions and export controls or considering reorienting their regional sales plans or operational footprints, the U.S. government has resources to assist companies conduct due diligence and to consult directly with the agencies responsible for developing and implementing these actions.

For example, the Treasury Department’s Office of Financial Asset Control (OFAC) offers consultations on specific sanctions questions. Commerce’s Bureau of Industry and Security (BIS) export counselors can also consult on specific questions regarding a business’ products and the export control lists that BIS administers. Furthermore, the Commerce Department’s Consolidated Screening List search tool is the most comprehensive due diligence tool for checking entities and individuals against the U.S. government’s sanctions and export control lists.

An upcoming segment will take a look at the current business environment in Ukraine. The U.S. government continues to coordinate humanitarian and other relief to Ukraine. To learn more or get involved, visit our Ukraine: Support and Engagement page.

h1

First-Ever U.S.-Ukraine Business Forum Provides Important Recommendations For Improved Economic Partnership

July 16, 2015

This post contains external links. Please review our external linking policy.

This post originally appeared on the Department of Commerce blog.

Post by Bruce H. Andrews Deputy Secretary of Commerce

Commerce Deputy Secretary Bruce Andrews Addresses First-Ever U.S.-Ukraine Business Forum

Commerce Deputy Secretary Bruce Andrews Addresses First-Ever U.S.-Ukraine Business Forum

This week, I had the opportunity to participate in the first ever U.S.-Ukraine Business Forum, co-hosted by the Department of Commerce and the U.S. Chamber of Commerce. At the forum, Vice President Biden, U.S. Secretary of Commerce Penny Pritzker, Ukrainian Prime Minister Arseniy Yatsenyuk, U.S. business leaders, other government officials, and I met to discuss the future of American business in Ukraine and an improved economic partnership.

To kick off the forum, Secretary Pritzker highlighted the important steps the Ukrainian government has made in the past year toward increased economic stability. Among other changes made as part of their economic reform agenda, we applaud Ukraine’s commitment to developing their  energy sector, and streamlined electronic systems for new and current businesses. Additionally, the Obama Administration has pledged its support and provided $2 billion in loan guarantees to Ukrainian households, and almost $16 million to economic stabilization programs.

Ukraine has made significant strides over the past year. Forums like this one provided an important platform to jumpstart the conversation between business leaders and government officials, and help set the groundwork for even more progress.

At the forum, American business leaders gave critical input to Ukrainian government officials about the conditions they believe are necessary to improve the investment climate in Ukraine. For example, I heard them present multiple recommendations to Ukrainian government leaders about the need to be more transparent and efficient if they want to attract more foreign investment. Several roundtable discussions held over the course of the day highlighted areas that could benefit from transparency, including agribusiness, energy development, and intellectual property protection. Many U.S. companies see the benefits of investing in a country like Ukraine, but they would like to make sure the government continues to work toward a stronger economy and a stronger investment climate.

The Department of Commerce plays a key role in navigating these global markets. For example, our Foreign Commercial Service offices around the world facilitate engagement and dialogue between the U.S. private sector and foreign governments, including Ukraine. These offices are critical to shaping the best market possible for U.S. businesses.

At the event, Secretary Pritzker announced that she will travel to Kyiv again in October. This upcoming trip shows the Commerce Department’s commitment to maintaining open dialogue between the U.S. and Ukraine. By working together,  we can support a strong, prosperous Ukraine, and foster a transparent and efficient economic partnership that our businesses can thrive in.