October 1, 2022

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Russia, Business |  Norwegian businesses in Russia: - We are concerned

Russia, Business | Norwegian businesses in Russia: – We are concerned

Although presented Thursday afternoon and evening, many of the details in the various restraint packages are not yet known. New sanctions by the United States and the United Kingdom have created major obstacles for Russian banks and companies to raise capital in the dollar market. Norway will probably follow EU sanctions, which apply to export finance and many other sectors.

At the Norwegian-Russian Trade Union Confederation, Hans-Olav is closely monitoring the sanctions.

– Now the primary thing is to monitor the situation and find out what is going on. We are getting significant information from the media and experts following this case, Rectal tells Netavicen.

– What happened was unexpected. As a result, both the United States, the European Union and the United Kingdom have imposed severe sanctions and Norway has joined the EU. Today, the EU will elaborate further on what their sanctions mean, but at the moment it is a bit confusing what sanctions really mean.

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Already have banking problems

More than a dozen banks are now allowed in Russia, including Sberbank, Russia’s largest savings bank. This could have repercussions for Norwegian companies.

– For some it is a big question. Many companies have the work done by them and they have arrears to be received within a month. They do not know how to get paid. There are many Norwegian companies with contracts in Russia in the future. If all of this is canceled, it could pose problems, Rectal says.

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– We are worried

The CEO also says that it is difficult for Russians to carry out new tasks when they do not know how to get paid.

– We are a trade association, which is mainly concerned with daily life, but it is clear that what happened affects us and many others, including Norwegian businesses in Russia. We care about our members and hope that negotiated and peaceful solutions will be reached quickly, he says.

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Not all restrictions are justified

Hans Christian Dale Nicard has lived in Russia for over 25 years and has worked with financial investors in Russia. In total, he has worked with 45 companies in various fields in Russia.

Since 2019, he has been managing Innovation Norway’s investment fund in northwestern Russia and Eastern Europe.

– If the small business investment between Russia and Norway is not to disappear completely, one must rely on international payment services, says Netavichen.

– I have an idea that the sanctions that will be introduced are aimed at directly attacking key institutions and things related to Putin. Not all barriers to implementation will be effective.

Nygård says one is not sure whether there are sanctions – or whether it will make it more difficult for Norwegian companies, but one must keep in mind that it is already very difficult.

– For example, the banking system in Norway is very cautious in money transactions from Russia. One is “guilty until proven guilty” in a way, so there is a lot to document.

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– They are biting their nails now

– Are there any Norwegian companies that could be affected by the impending sanctions against Russia now?

– There are many Norwegian companies with supply contracts in Russia, and here is the Norwegian maritime industry. He says they are biting their nails now.

– If you try to build relationships and relationships for the future, there will be many obstacles and eventually everything will fall apart, he says.

Donske Bank: – Very soon to say

Danske Bank tells NTB that it is too early to tell how Norwegian sanctions will affect Norwegian companies in Russia.

– The problem is, there are no details on which units and activities are affected. Zullam says nothing can be said in detail about which sectors and transactions will be affected.

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Less restrictions when making payments

Sanctions will first prevent the Russian economy from financing outside Russia. In addition, the EU has opened up what they call “export control”. It is unknown at this time what he meant by that. When Russia invaded Crimea in 2014, Norwegian salmon exports to Russia were hit by sanctions and counter-sanctions.

– Currently, it is possible to exchange funds between Norway and Russia. Russia is not excluded from the International Monetary Fund, but its banks are subject to restrictions on what they can do. As for Norwegian companies, it depends on who they are in contact with, Zullam says.

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He says sanctions may affect the actual flow of goods and services, but there are fewer barriers to payment.

This is because Russia is not exempt from the international exchange system Swift, which makes most banking transactions impossible. Zullam points out that the lack of this permit may have contributed to the stock market crash in Moscow and other parts of the world that were lower than expected on Thursday.

The market was made easier than the size of the barriers

– Sanctions against oil and gas exports and the withdrawal from Swift will have a major impact on both Russia and Europe. The market was at peace. The chief economist says you can discuss whether Russia is really being punished or not.

In his speech on Thursday night, US President Joe Biden said that the United States wanted to exclude Russia from Swift, but not the EU.

– Swift is an organization where all financial transactions are located. If Russia is expelled, money cannot be exchanged between Russia and the outside world. For example, Zullam explains that if you buy an item online, you will need to keep the Swift code in store to get the information that you paid for that item.

(© NTB / Nettavisen)