Consulting businesses from “countries aggressors” may have to take their business elsewhere out of Russia

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Svetlana Subotina for Izvestija

A bill was introduced in the State Duma proposing a new concept of “country aggressor”. States which have imposed sanctions against Russia will fall under this category.

The draft law introduces restrictions for physical and legal entities from “countries aggressors”, and affiliated Russian legal entities. They would be prohibited from engaging in audit, legal and other consulting services in Russia. The list of prohibited activities may be expanded by the government of Russian Federation. The authors of the bill are deputies Katasonov, Romanov and Fedorov.

“The government of the Russian Federation in order to protect the foundations of constitutional order, national defense and state security, protection of domestic market of the Russian Federation and development of national economy, has the right to approve the list of “countries aggressors”, – stated  the explanatory memorandum of the bill, which proposed that the government would be able to approach the list selectively, taking into account all factors.

“It’s up to the government to determine what company will be included on the sanctions list. But at least it will include all six major U.S. accounting and consulting firms operating in Russia: Deloitte, KPMG, Ernst & Young, PricewaterhouseCoopers, Boston Consulting group, Mackenzie”, – said deputy Fedorov.

Meanwhile, the PM believes, that despite the fact that the bill will be considered by the house only in the fall, the Cabinet of Ministers can act in an accelerated mode, “without the law, at least in terms of state contracts.”

According to the Director of the Institute of Problems of Globalization, Mikhail Delyagin, any corporation, even very large, is loyal to the the country in which it is registered, and it can perform delicate orders in favor of their state, without admitting it.

In some countries, for example in the USA, there is a revolving door between business and public office. Any Director of the American consulting firm can subsequently end up in a high position in the CIA, and then get back in business,” – said Delyagin.

Economist Nikita Krichevsky said that Russian government agencies and state-owned companies entering into agreements with foreign consulting and auditing firms use the Russian budget to continue to finance a foreign economy despite sanctions and thereby help the outflow of billions of dollars to the West.

“This doesn’t allow Russia to develop its own consulting business,” – said Krichevsky. The bill has to clearly formulate that sanctions from the Russian side should extend not only to maternal Western companies, but also their subsidiaries and franchisees.

Krichevsky was surprised that Russian business still goes to the companies which showed their incompetence and unprofessionalism. He recalled that in the mid 1980’s the company “Mackenzie” on the basis of their analysis gave false predictions, which led to bankruptcy of some corporations.

Krichevsky believes that under the conditions of information war, these companies can give Russian businesses “incorrect or false recommendations.”

Translated by Kristina Rus

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