Britain’s accounting, management consulting and PR firms have been told to cut ties with Russian clients as part of a government ban on professional services exports to the country.
Russian companies and oligarchs have long relied on London-based advisers, including consultants and PR professionals, to represent them in the west. The big UK auditors have employed more than 15,000 people in Russia, serving large companies across natural resources and banking.
Foreign secretary Liz Truss on Wednesday said that the new measures would mean Russia’s businesses can no longer use the UK’s accountancy, management consultancy and PR services, which accounted for 10 per cent of Russian imports in these sectors.
Truss said that “doing business with Putin’s regime is morally bankrupt and helps fund a war machine that is causing untold suffering across Ukraine”.
She added: “Cutting Russia’s access to British services will put more pressure on the Kremlin and ultimately help ensure [President Vladimir] Putin fails in Ukraine.”
Business secretary Kwasi Kwarteng said that the UK’s professional services exports “are extraordinarily valuable to many countries, which is exactly why we’re locking Russia out”.
A 2020 report by the UK parliament’s intelligence and security committee said that Russian money had been put to use in “extending patronage and building influence across a wide sphere of the British establishment”, including PR firms that had been “willing beneficiaries, contributing to a ‘reputation laundering’ process”.
Some of these advisers were seen as key to the working of the so-called “London laundromat”, where Russian money was invested into trophy assets in the UK.
London-based professional services firms have already cut off their Russian clients, although some audit groups have warned that it could take months to fully exit while others are working to separate the locally owned firms from their global networks.
Advisory firms such as EY and PwC have said they would not work for Russian government entities, state-owned enterprises or sanctioned entities and individuals anywhere in the world. PR and management consultancy firms have similarly ditched contracts with such clients.
Tamzen Isacsson, chief executive of the Management Consultancies Association, said that UK consultancy firms had already ceased offering services to Russia “and have made rapid changes to their operations in the country, strictly abiding to sanction rules and complying with all new regulations and laws”.
She added that Russia was not a major foreign market for UK management consultancy services.
The foreign secretary also announced 63 new sanctions, including on media organisations such as state-owned Channel One, which the government has accused of “spreading disinformation in Russia, justifying Putin’s illegal invasion as a ‘special military operation’.”
Those sanctioned include war correspondents with Russian forces in Ukraine. Other organisations that have had sanctions imposed on them include All Russia State Television and Radio Broadcasting, InfoRos, a news agency, website SouthFront and the Strategic Culture Foundation, an online journal.
