In March 2014, we first wrote about how the introduction of sanctions against prominent Russian (and later Ukrainian) individuals (and later companies) would be more than just an irritation to them.
Richard Elsen, Chairman of Byfield Consultancy who has significant experience working with clients from the Former Soviet Union (FSU) on highly sensitive reputational issues, pointed out then that beyond the practical difficulties of asset freezes and travel bans (and now limited access to finance), there was another very important dimension – enduring reputational damage.
Today, almost four months later, a number of Russian and Ukrainian prominent individuals and companies are facing a third round of sanctions that involve more reputational damage. BP has already admitted that “further economic sanctions could adversely impact our business and strategic objectives in Russia, the level of our income, production and reserves, our investment in Rosneft and our reputation”.
All those sanctioned and related to them have found themselves subject to intense worldwide media interest and speculation. The potential for ongoing negative news coverage increases as oligarchs are going into court. “There is no question that rich oligarchs, and even moderately rich oligarchs, will challenge these sanctions”, Jonathan Ames quotes Andrews Campbell-Tiech, QC, of Dyers Chambers his article for The Times entitled ‘Oligarchs seek advice on Ukraine fallout’.
Inevitably, this kind of coverage will be damaging to reputations and unless fast action is taken to limit the effects of being on the sanctions list, the damage is likely to be deeper and longer lasting than need be. Individuals affected by this should be thinking in terms of how to use the media, rather than running away from it.
While oligarchs are challenging the sanctions in European and UK courts, litigation PR and reputation management specialists have become a ‘must-have’ on the team alongside their lawyers. Some sanctions even come with Interpol Red Notices, making the reputational challenge even greater.
Proactive engagement with the media can significantly soften the coverage and help to position the individual in a much more positive light. The arbitrary nature of the sanctions and the way that they have been imposed should be part of developing a supportive overall narrative geared towards reputation management. But the communications should go far beyond the media.
The sanctions will cause business interruptions, including an inability to transact or get access to finance. It is important that a crisis communications plan is quickly devised and put in place to reassure key stakeholders who otherwise may misread the situation.
Adopting a comprehensive communications approach means that reputational damage can be minimised and mitigated through a strong narrative. Without plans in place which are carefully executed, the negative reputational effects will be enduring long after the sanctions are eventually lifted.
Byfield’s FSU desk has direct experience of managing the reputational risks involved in sanctions and Red Notices, working alongside the Russia, CIS and FSU desks of national and international law firms. We dovetail the communications strategy with the legal strategy to ensure that the reputations of our clients are protected in the long-term. If you or your client is facing reputational risks connected to sanctions or Red Notices, get in touch here.