By admin on Friday, 15 April 2022
Category: Politics

These lawyers and firms are still working with Russian banks, even amid the war

The debate over what lines, if any, a firm should draw when it comes to the clients they represent is a continuous one in politics, popping up often during confirmation hearings for lawyers looking to take on government posts. Russia’s invasion of Ukraine has sparked another iteration of it, one taking place against the backdrop of a bloody war with no clear ending in sight.

The early effort to punish Russia for the invasion led a host of businesses to cut their ties to the country. But it also has created some opportunities for those who can navigate the tricky legal corners that come with economic sanctions regimes.

Ferrari said people had reached out to his firm for help getting off the sanctions list, but after he told them how difficult it would be, they declined to sign a contract. He did not rule out representing those entities in the future. He also noted that it was not uncommon for parties to come back months or even years later to hire the firm.

“If you’re going to subject people to laws then people should have the right to understand what those laws mean and how they apply to them,” he said. “That’s a hill I’m willing to die on.”

“If you don’t want to represent them because you have other clients who you know are taking some sort of position and you don’t want to lose your other clients, I guess I’m not in that position,” he said of others who have eschewed Russian-tied business deals in the wake of the war. When asked where he would draw the line on new clients, Ferrari responded that he would not “violate the law.”

Some lawyers moved to cut ties with their Russian clients in the wake of the invasion. Sidley Austin terminated its relationship with VTB Group after it was hit with U.S. sanctions, and lawyers at White & Case and Debevoise & Plimpton moved to withdraw their representation of Sberbank, which was sanctioned too.

But others are still at it. Latham & Watkins continues to represent VTB Bank in a federal case out of New York in which the Russian bank is listed as a co-defendant, according to a court records database. The family of a young man killed when a missile hit Malaysia Airlines Flight 17 in 2014 sued the bank, as well as Sberbank and others that, the plaintiffs allege, “provided ongoing and essential financial support” to the group that launched the missile: the Donetsk People’s Republic.

Lawyers for White & Case and Debevoise & Plimpton, which are representing Sberbank, have filed notice that they will ask the court to withdraw from the same case, as soon as their client obtains substitute counsel. Latham & Watkins has given no such notice to the court. A firm spokesperson did not return requests for comment.

Additionally, two other law firms, DLA Piper and Norton Rose Fulbright, are still registered to represent Rosneft, a Russian state-controlled oil company. The case in which Rosneft is represented by a DLA Piper attorney is currently stayed. The U.S. has banned the import of Russian oil and sanctioned Rosneft’s chief executive officer Igor Ivanovich Sechin.

All three firms had earlier announced plans to shutter their Russian offices, but none have filed paperwork with the court to terminate their relationships with the Kremlin-connected companies, according to the Public Access to Court Electronic Records system.

DLA Piper has previously said its intention was to transfer its Russian business to members of its team that it once employed in Russia. Norton Rose Fulbright earlier said it was not accepting “further instructions” from those connected to the Russian regime and would review whether and how to exit its current work. Where that was not possible, it added, it would donate the firm’s profits.

DLA Piper and Norton Rose Fulbright did not return requests for comment.

It’s unclear if other attorneys are continuing to work for those connected to the Russian state because they’re not required to disclose it. Even if a lawyer’s work hits a threshold that makes it subject to the Foreign Agents Registration Act, the Act includes a legal exemption to reporting duties that “is triggered once a person, qualified to practice law, engages or agrees to engage in the legal representation of a disclosed foreign principal before any court or agency of the Government of the United States,” according to the Department of Justice.

Ferrari maintains that his work falls under the exemption for legal services under FARA.

Lawyers have argued that the DOJ offers insufficient guidance about its application.

“There is some uncertainty for lawyers and law firms when they are engaging with government officials,” said Brandon Van Grack, who led the DOJ’s FARA unit and is now an attorney at Morrison & Foerster. “There isn’t great clarity from the Justice Department, but the more you are talking about engagements that have some sort of formalized proceedings and is connected to an investigation, the more likely you are that that conduct would … be covered by the exemption.”

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