Eric Koch is spending the next 10 days or so visiting family in California. In the meantime, some of his intrepid readers have volunteered to write for Sketches, for which he is very grateful. This guest posting has been provided by Henry Lotin.
A modern lesson in the extraterritoriality of international sanctions?
Source: Financial Times of London, April 2, 2014
Miley Cyrus has twerked her way into a geopolitical controversy amid questions over whether the promoter of her sellout concert in Finland risks falling foul of U.S. sanctions on Russia after its annexation of Crimea.
The Helsinki venue due to host Ms Cyrus, Justin Timberlake and other U.S. stars in the coming months is owned by a Finnish holding company controlled by three Russians singled out for U.S. retaliation.
However, according to the wording of the new U.S. sanctions and lawyers specialising in this area, Live Nation [the U.S. promoter] should theoretically be barred from completing any financial transactions with Helsinki’s Hartwall Arena unless it first receives special dispensation from the U.S. Treasury.
Anthony Woolich, a partner at London law firm Holman Fenwick Willan, said the legality of Live Nation’s partnership with Hartwall would probably depend on whether or not all the financial transactions involved had taken place before the sanctions list was released.
“If [Live Nation] still has to pay money for the use of the venue that could be a problem,” said Woolish.
The stadium is owned by a company called Arena Events OY…50 per cent owned by Gennady Timchenko, co-founder of oil trader Gunvor and one of 27 Russian businessmen and officials who have been sanctioned by the White House. Arkady and Boris Rotenberg, two businessmen brothers who also appear on the sanctions list – and, like Mr Timchenko, have longstanding ties to Russian president Vladimir Putin – each own 25 per cent….
The Helsinki case highlights the confusion and legal uncertainty surrounding the two-week-old sanctions. The question [is], …how strictly the White House intends them to be interpreted….
There has been no indication of any cancellations at the venue in light of the sanctions, said Roman Rotenberg, the son of Boris Rotenberg who manages the Rotenberg family’s Finnish assets. “It’s business as usual,” he said in an interview. “Why should the Finnish people suffer from U.S. sanctions? The concerts are sold out.”
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Bank Rossiya, a top-20 lender which was sanctioned, has significant Russian media holdings….
Bank Rossiya, owns a stake in Vi, Russia’s leading television media buyer, which works with leading international ad agencies including WPP, Omnicom and Publicis.
A spokesman for Vi, which controls one-third of Russia’s TV advertising market,…added that big international ad agencies were likely to only terminate their relationship with Vi “at gunpoint”. “Russia is a major advertising market and the only market that’s growing,” he said.
A senior executive at an American media agency that works with Vi agreed, saying his employer’s compliance department had not even looked into the matter.
“Nobody in the industry here thinks that the sanctions will have any impact,” he said. “As for us, we haven’t received any instructions from headquarters on this.”