Lawyer Monthly - May 2022

First there are the consequences for the overall balance of a group, which can be dangerously endangered when a single branch generates a high ratio of total turnover in Russia, which can push to carefully assess this type of decision. Next, it should be remembered that the first companies that were led to withdraw from Russia – and which communicated widely about it – were those that did not generate significant turnover there, which was therefore more of a PR opportunity than a real economic sacrifice. Many of those who finally decided to withdraw from Russia did not do so by choice but quite simply because, faced with serious supply problems due to the sanctions, they could not do otherwise. This was the case, for example, of Decathlon which, unable to find alternative suppliers in China or Russia, resolved to temporarily cease its activity. Philippa Foot’s tramway dilemma takes on its full meaning here. Take the risk of staying and being portrayed as a financier of an abject war by paying a tax to the 17 MAY 2022 WWW.LAWYER-MONTHLY.COM What should businesses and governments take away from this event in terms of operational resilience? If addiction is the mother of all evil, autonomy is the key to freedom. The European doctrine in force for decades was to strengthen its economic ties with Russia in order to obtain security and stability in relations. It is clear that the result is strictly not up to par, but more importantly, such a strategy generated a real energy dependence. In the same way that too much outsourcing induces dependence on subcontractors – as we have already mentioned in relation to the COVID pandemic – which in the event of a crisis and unexpected event impacts the entire chain of production, an energy dependence with a third state, even if it were a friend for a day, can have dramatic consequences in the event of a diplomatic reversal. Know how to produce in-house and not depend on anyone. This is the obvious, quasi-survivalist asset that governments and businesses alike need to keep in mind. And what you cannot produce, or what you have to buy if you stick to absolute advantage theory, you have to get from enough different people so that in a crisis, you can always keep an alternative solution. Putinist state, or leaving and taking the risk of being nationalised and losing millions of euros in investments that will eventually be recovered by this same state. Another question then arises: in terms of economic stakes, what would benefit the Russian state the most? Moreover, to speak of a “mass departure” is quite popular. L’Oréal, for example, has announced the closure of its 40 stores, but has kept its production plant in Vorsino. Renault has still not withdrawn from the shareholding of the Avtovaz Company – the Russian manufacturer of the LADA brand – of which it owns 68% alongside the Russian state’s 32%, and Accor has not abandoned its portfolio of 56 hotels on Russian territory. The choice must obviously be dictated by one’s conscience, but we must measure the chance such a departure within the framework has of benefiting the Ukrainian cause against the consequences in economic and social matters, particularly in terms of jobs destroyed, that such a decision may induce. “ If addiction is the mother of all evil, autonomy is the key to freedom.

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