Law firm Arthur Cox has halted its work for dozens of Russian clients because of the Ukraine invasion, as pressure piles on business to cut ties with the Putin regime.
The firm’s roster of Russian clients included some groups targeted by international sanctions and some groups in which key executives have been hit by sanctions.
Among them was an Irish subsidiary of Rosneft, the state-controlled oil giant closely linked to the Kremlin, and a Dublin-registered financing company which had Rosneft as its only borrower. Rosneft chief executive Igor Sechin, a former deputy prime minister of Russia, was hit by US sanctions against “Russian elites” after the invasion. EU sanctions this week prompted France to block his superyacht from an urgent departure from the Mediterranean port of La Ciotat, near Marseilles.
Arthur Cox, one of Ireland’s largest solicitors firms, also had a specific “Russian capital markets practice”, acting for more than 60 Russian borrowers. A page on the company’s website said a partner in the firm, Glenn Butt, has advised on more than 220 Russian deals in the last 14 years.
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Clients, named on the same web page, included: lenders Alfa Bank, Credit Bank of Moscow, Sovcombank, and TCS; Russian state leasing firm GTLK; Russian Railways; potash producer Uralkali; miner Norilsk Nickel; steel and mining group Metalloinvest; chemicals company Phosagro; and steel group NLMK.
The EU resolved this week to exclude Sovcombank from the Swift payments network and Alfa Bank ranks among the institutions the EU has banned from issuing bonds, shares or loans to refinance their operations.
“We are appalled by the horrific scenes in Ukraine and condemn the invasion of Ukraine by Russia, which has prompted a review of all existing and any new Russia-related work,” Arthur Cox said in a statement on Friday.
“At this time, we have decided to both decline new instructions and cease all Russia-related work that goes against our values or existing or emerging sanctions. Though we are subject to strict client confidentiality rules and are not at liberty to comment on individual clients, we can confirm that this review has already resulted in our ceasing to act for a number of clients.”
Policy change
The statement, on the ninth day of the Russian invasion, reflects a policy change. On the first day of the attack the firm said it “has always and will continue to be guided by and comply fully with all applicable sanctions” when The Irish Times asked whether its work for two entities with Rosneft links might be reviewed because of the military campaign.
The oil group has long had a corporate vehicle in Ireland, Rosneft International, which facilitates investments and for which Arthur Cox was solicitor. The Dublin unit, with a registered office at Merrion Square, reported a $28.53 million (€26.13 million) pre-tax profit in 2018 and a $2.83 million profit in 2019.
Companies Office records show Arthur Cox was solicitor to a separate Irish company, Rosneft International Finance. That entity issued $3 billion in loan notes in 2012 to Rosneft, $2 billion of which falls due next Monday, according to accounts filed in December.
The Arthur Cox statement added: “We are actively engaging with our pro bono partners to find ways to support Ukrainian people who are arriving in Ireland, alongside our support for the International Red Cross.”
