UK hits Russia with British IT services ban
Annexed Donetsk? No more consultants for you then
Fresh export sanctions were leveled at Russia by the UK last week, with IT consultancy among other professional services that are banned.
The move came in response to the illegal annexation of the Ukrainian regions of Donetsk, Luhansk, Kherson, and Zaporizhzhia after Russian president Vladimir Putin held sham "referendums" in the final week of September.
Under the new sanctions, Russia will lose access to not only to British IT consultancy, but architectural services, engineering services, and transactional legal advisory services for certain commercial activity – described by the UK government as "major western services that Russia depends on."
It's hard to quantify exactly how much of Russia's IT services originate from the UK, with the Foreign Office saying it was moving in "lockstep" with other countries, explaining that the largest country in the world (at 17.1 million km²) imports 67 percent of its services from sanctioning countries.
The IT consultancy services banned include those:
designing IT systems and software applications. Alongside the UK's previous ban on quantum computing exports and computing services, and with over 170,000 IT specialists fleeing Russia since the invasion began, these measures will erode further Russia's ability to maintain technological development with the rest of the world.
It's unclear whether the impact will be particularly large – not many UK IT consultancies have been doing work in Russia, with Investment Monitor estimating most British orgs had already withdrawn by May this year, and no mentions of UK firms on Yale School of Management's list of 1,000 companies who have withdrawn from the region.
While a 2018 Overseas registry doesn't even mention Russia as a region, a few UK IT companies did previously have a presence in the country. Capita, which said earlier this year it had "minimal interactions" with Russia and Belarus, already stated it planned to cease any business activities and supply chain dependencies in March this year, "because it is the right thing to do," and Computacenter had cut ties by September last year [PDF].
Three of the "big 4" global consultancies – PwC, EY, and KPMG – said they'd stop serving Russia-based clients in March, with Deloitte cutting ties in May. Accenture, which had 2,300 staffers there, also pulled out of Russia in March.
Large US-based IT consultancies including Boston Consulting Group and New York-headquartered McKinsey, which appears to have operated in Russia for over 20 years, have also suspended work with clients in Russia.
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Do you know any IT consultants who will be hit by the export sanctions? Get in touch here. ®