Danish firms issue guidance on managing risks from Ukraine conflict

The Danish Confederation of Industry (DanksIndustri (DI)) has advised its 18,000 member firms across all sectors to take extra care when trading with Russia, because of the unprecedented sanctions imposed on the country by the EU, US, UK and Canada. The DI also gave advice to its member firms on how to ensure employee welfare if active in the Ukraine, and warned Danish firms to sharpen their focus on corporate cybersecurity and protection against potential cyberattacks because of the conflict. “There are [several] things to keep in mind when trading with Russia: if the product is subject to sanctions, you risk selling to a sanctioned person; and you can get money for the goods through the banks involved,” said the DI. The DI explained to Danish exporters that the following types of products that are prohibited from being sold to Russia: Dual-use products (i.e. civilian products that can be used militarily) Advanced technology (including electronics, information security products, sensors and lasers, navigation equipment, and marine and aerospace technology) Products for the oil sector Products for the aerospace industry Luxury goods. There is also a ban on importing a number of steel products from Russia into the EU, added the body. The DI also reminded members to be aware that they must not trade with companies owned by persons who are subject to EU sanctions. “If the person is subject to sanctions, this will be stated on the EU's sanctions portal. Just enter the last name of the person you want to look up in the registry,” advised the group. The group also reminded members that Russian banks that have been excluded by the Swift payments system and can therefore not be used in connection with trades. The banks in question are: Bank Otkritie, Novikombank, Promsvyazbank, Bank Rossiya, Sovcombank, VNESHECONOMBANK, and VTB BANK. Regarding the safety of employees at Danish companies in Ukraine, the DI recommended that companies follow the recommendations of the Danish Ministry of Foreign Affairs. The ministry has raised the safety level in its travel guide on Ukraine to red, which means that any travel to the country is not recommended. In addition, Danes in Ukraine are encouraged to leave the country while it is still possible, advised the DI. “Today, it is the case that Ukrainian citizens do not have a visa requirement for EU countries (unlike Russian citizens). This means that Ukrainian citizens who are employees of a Danish-owned company in Ukraine will be able to go to Denmark or another EU country, where they will legally be able to stay for up to 90 days. “If Danish companies are considering offering Ukrainian employees positions in Denmark, a residence and work permit will have to be applied for in the usual way. If the hostilities continue, Ukrainians will have the opportunity to apply for asylum in EU countries,” explained the group. The trade body said the cyber threat has been very high for a long time against Danish companies. “Therefore, our basic recommendations on cybersecurity are the same as before the Ukraine conflict, but we recommend that you exercise due diligence and sharpen your focus on corporate cybersecurity and protection against potential cyberattacks,” advised the body. The DI also pointed out that Russia's invasion of Ukraine has created great uncertainty in the energy market and may have implications for security of supply. Members are advised to visit the Danish Energy Agency's website to learn about its emergency supply plans. Danish firms must also brace themselves for wider economic impacts from the conflict. “DI has compiled some of the economic key figures most affected by the war in Ukraine. It is especially the prices of raw materials that are strongly affected. This is because Russia and Ukraine are major suppliers of a wide range of raw materials to the world market. This applies in particular to grain, wood, iron/steel, oil and gas,” said the body. “Russia's invasion of Ukraine has significant consequences for the Danish economy. Even if the parties quickly find a diplomatic solution and remove the sanctions again, the economy has suffered some damage. With persistent sanctions, growth will fall by approximately 0.5 percentage points in both 2022 and 2023, compared to the estimate in DI's forecast from February. If energy trading is also stopped, growth will fall to just 1% per year,” explained the DI. “In the short term, the war will reduce growth in Denmark and the rest of the world. At the same time, there are many indications that trade patterns and relations with Russia will change for many years to come,” it added.

Danish firms issue guidance on managing risks from Ukraine conflict

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