On 29 January, the Law Society’s Europe and CIS team hosted a meeting of professionals from the legal and financial services sector drawn from the membership of TheCityUK. Discussions focused on the current geopolitical situation and its economic consequences in Russia, Kazakhstan, Azerbaijan and the broader Eurasia region.
The Foreign and Commonwealth Office was also present and led a discussion on the current status of EU sanctions on Russia.
Attendees from major financial and related professional services organisations and embassy representatives heard that Russia continues to improve its financial standards and regulations, led in part by the work of the Moscow International Financial Centre (MIFC) Taskforce and supported by its partnership with UK expertise coordinated by TheCityUK. The meeting heard how progress continues in the areas of financial education and professional qualifications as well as in other areas crucial to development of the MIFC. There was concern, expressed by both UK and Russian sides of any possible restrictions placed on Russia in respect of access to the international payments platform, SWIFT; recognising that the unintended consequences of any potential new sanction could prove far more damaging than that which had been originally intended and that responsibility lay with governments to ensure comprehensive consultation with the legal, finanancial and related professional services community before decisions are taken.
Presentations at the meeting did focus on the downturn of the Russian economy; noting that the significant drop in oil prices and decline in trade, with a 12% inflation and17% interest rate, as well as the clear effect of sanction are proving damaging both to the country and its closest trading partners.
Moreover, the FCO was clear that if Russia continues with destabilisation activities in Ukraine, in breach of the Minsk Memorandum and peace deal agreed in late 2014, then the EU should be expected to impose even stronger sanctions while current measures are likely to remain in place for the foreseeable future.
The meeting also covered the visit of the Prime Minister of Kazakhstan and senior Ministerial delegation to the Global Law Summit on 23 / 24 February, and this will include the Minister of Justice, the Executive Secretary of the Ministry of Justice and the General Prosecutor. Azerbaijan was also a focus, with the Lord Mayor of London leading an official delegation to Baku from 31 May to 2 June 2015.
What does this mean to the lawyers’ community?
On the one hand, modernisation of internal operation and infrastructural changes to financial institutions and Central Banks bring changes to (cyber) security, investment management, data protection and new technological requirements thus there will be a need and scope for further professional development across the Eurasia region. On the other hand, stronger and increased restrictive measures by the EU will surely mean more work for the profession. Legal professionals are likely to be kept busy advising on sanctions and their implications for the foreseeable future.
Severe economic conditions in Russia do have a direct impact on Kazakhstan and Azerbaijan; however, the good news is that sanctions are not directly applicable to these countries. In fact, as the UK continues to widen its interests in the countries of the former Soviet Republic, in Kazakhstan and Azerbaijan in particular, there are plenty of developing opportunities in the energy, legal services, infrastructure and education sectors. The Law Society will assist the Lord Mayor’s office when visiting Azerbaijan and attending the Caspian Corridor Conference which takes place on 12 March at EBRD in London. The Law Society is also organising a Central Asian inward trade mission in June 2015.
For more information regarding capital markets and forthcoming events in Russia, CIS and Mongolia visit TheCityUK’s website or contact Steve Bourne – Head, Eurasia at TheCityUK (email@example.com).
For further regional opportunities for legal professionals, events and trade missions visit the Law Society’s Europe & CIS webpage.