Earlier this week, in a simulated attack, Russian warplanes repeatedly whizzed by a U.S. Navy ship traveling through international waters in the Baltic Sea, according to multiple news reports .
With tension between Russia and the U.S. rising, law firms are finding themselves right smack dab in the middle.
Bloomberg reports that amid sweeping U.S. sanctions, many penalized Russian entities, including two of its largest banks, are making a “broader push” to hire U.S. law firms and lobbying shops to navigate “the sanctions minefield.”
Add to that list the country’s largest oil-producer, state-owned Rosneft OSJC. Although Rosneft is subject to U.S. and European sanctions, it reportedly hired White & Case to help it sell $7.5 billion in its shares as it seeks to raise money to offset persistently low oil prices.
White & Case declined to comment on its role. But law firms appear to have more freedom than other businesses to navigate the sanctions minefield, according to the article:
“U.S. sanctions do not prohibit U.S. persons, including law firms, from providing legal advice to the Russian government,” the Treasury Department said in an e-mailed statement. “We have not sanctioned the government of Russia. We would note though that it remains illegal for U.S. persons to facilitate transactions that U.S. persons may not directly engage in.”
So providing legal advice is okay, but “providing debt financing for more than 90 days” is not okay, which is why western banks may be unwilling to work with White & Case on the sale, according to the article.
Anders Åslund, a senior fellow at the Atlantic Council who studies the Russian economy, said law firms can counsel sanctioned entities in the same way that murderers are given a defense attorney. That is, everyone is entitled to council, said Åslund, who is based in Washington, D.C.
“This is a bonanza for the law firms because the law firms are in no way touched by the sanctions,” he said.
For banks, it is a different story: In 2014, BNP Paribas agreed to pay an $8.9 billion settlement for violating sanctions against Cuba, Iran, and Sudan. That was big enough to scare U.S. banks not to take any risks with violating Russian sanctions, said Åslund.
“The banks stay away from it and the law firms find they have quite a lot of work,” he said, adding that much of the work involves speaking to and lobbying regulators in Washington, D.C. about who is on the list, and how to be removed.
For now, the White & Case office in Moscow appears to be doing alright, with 10 partners and 41 other lawyers listed on its website .
Squire Patton Boggs, another law firm that has been in the news for helping a lending institution affiliated with Russia’s state owned gas producer Gazprom, listed four partners in Moscow and more than a dozen other attorneys.
We’ve reached out to Squire and other law firms with operations in Russia for comment and will update if we hear back.