Russia Update, March 15th

I've been providing irregular updates on the situation on the ground in Moscow, and how the situation is impacting international assignees and their families here.

The mood on the street in Moscow is quiet. The majority of people are trying to get one with their lives despite the tragedy unfolding across the border. There are regular, brave, attempts to hold protests in most cities, but these are quickly quashed by authorities. Speaking out against the “military operation” is now punishable by up to 15 years in jail, and all independent media has been shut down.?

?Security of Expatriates

We have had no reports of any security issues for foreigners in Russia. While there is still an overwhelming police presence around Moscow city centre, life in the city in general is calm, and state media is not stirring up public opinion against foreign nationals. Despite many conversations with clients, colleagues, friends and neighbours, I have yet to meet anyone who supports the tragic events in Ukraine.

Multinational withdrawals from Russia?

The number of international companies withdrawing from Russia continues to increase. Yesterday were seemingly the last working days for fast food operators such as McDonalds and KFC. Most international fashion retailers, such as Tommy, Uniqlo, Zara, Boss, H&M, have ceased operations for now. Multinationals with local manufacturing are winding down or have already stopped production. Coca-Cola and Pepsi have reportedly halted production, sales and distribution.?

Travel

There has been no significant change to travel options out of Moscow since last week, but prices have increased significantly. It was possible last week to purchase flights to Europe via Istanbul for €450-500, whereas tickets now are from €1,000, economy, with very limited availability for the next two weeks. Air routes are open to Dubai and Istanbul, and limited service to Belgrade. Exit on road transport via Estonia and Finland are still viable options.??

Most corporate expats have left Russia some time ago. Some expect to return in a matter weeks, others hope to return within Q2, and the remainder have accepted that this is a permanent or semi-permanent exit, and are cancelling leases and packing up their household goods to be shipped home. As we stated last week, the situation is so unpredictable that no one has a clear plan for the future. In coming years, someone will write a fascinating PhD about how such a sudden and unexpected turn of events has tested corporate emergency reaction and evacuation plans, both in Ukraine and in Russia, for very different reasons.

?Evacuating Russian Nationals?

A number of our clients are working on projects to evacuate their local employees to neutral locations such as Dubai and Turkey, initially for 90 days while they assess the situation. We are working with these clients to help their local employees prepare the required documents, obtain duplicates or apostilles, in preparation for their moves. We are also seeing increased demand for rental properties in Turkey, Azerbaijan, Armenia and UAE from Russian nationals fleeing the country.?

?Finance?

Apple Pay and Google Pay have ceased operating in Russia as of last Friday. Bank cards issued by Visa and Mastercard in Russia continue to work here, but not abroad, limiting Russian nationals access to funds while abroad, and foreigners access to funds while in Russia.?

Sanctions on Russian banks have not been widened so far, and a number of banks, such as Raiffeisen, Unicredit, Tinkoff, continue to operate, and receive payments in USD and Euros from abroad. Making foreign payments from Russia to abroad is extremely difficult.

Social Media?

Last week Twitter and Facebook were banned in Russia. This week Instagram has been added to the list. According to the Russian media regulator, Instagram has been banned for “promoting genocide of Russians” and in order to protect Russia’s youth from harm. Local politicians and media personalities continue to use social media, despite the bans. VPN usage is almost obligatory in Moscow.?

Warnings of food shortages.?

While there have been warnings of food shortages in Russia, we have yet to witness this in Moscow. Availability of most western brands will dwindle as wholesale supplies run down, so most likely next week we will already see this impacting stocks on shelves. Some supermarkets are reserving the right to temporarily restrict sale of certain items. Lenta, one of the largest retail chains in Russia, is for some reason limiting shoppers to two packs of dishwasher detergent at a time.?

?The Troika team is available 24/7 to assist our clients and partners at this time.