By Hamil R. Harris
When Russia invaded Ukraine, President Biden said that the impact of such aggression would be met with international sanctions so severe that it would cripple Vladimir Putin and his generals.
But 18 months later, Russia continues to get millions from multinational corporations, an example of moral hypocrisy that renews an old debate about how effective economic sanctions have been and what can be done to punish or shame companies that refuse to say no to Russia’s trading partners.
As the war in Ukraine rages, most Americans believe more than mere reputational damage should come to those who continue to do business with Russia. America, as usual, is doing more than its part in supplying aid to Ukraine, even as American citizens languish in food lines. Many are growing weary and believe America must take a stand when requiring that allies bear their fair share of the responsibility and not violate the spirit of the sanctions.
One example of why this is necessary is the behavior of commodities traders like Niels Troost, a Dutch oil trader and founder and owner at Paramount Energy & Commodities SA, a Switzerland-based commodities trading firm. Even though the US and other Western countries have imposed sanctions on Russia’s oil and gas sector, Troost’s company continued to trade with Russian companies. As a result, observers are keen to examine the possible engagement with or around US sanctions.
As reported by The Financial Times, Troost has spoken publicly about the importance of global food security. Yet, his company’s actions show they are willing to put profit above everything else, including the suffering of people in Ukraine, by buying oil from Russia above the sanctioned price.
To continue trade with Russia despite the sanctions, Paramount Energy & Commodities SA established a new company in Dubai called Paramount Energy & Commodities DMCC. With practically the same name as the original company, global observers are interested in understanding if this move allowed them to continue to profit from Russian oil while sidestepping the sanctions.
It has been widely reported that other Swiss-based companies continue to support Russia because, according to the country’s State Secretariat for Economic Affairs, “legally independent subsidiaries” of Swiss companies are not bound by Swiss sanctions. The European Union, more strident in its sanctions, does not allow subsidiaries to circumvent the sanctions with creative business structuring.
The behavior of companies that flaunt the sanctions highlights the need for stronger measures against those who continue to support Russia’s aggression against Ukraine. America can not be left holding the bag and the responsibility of policing the bad guys of the world. For those not paying attention, the Russians are, without question, the bad actors. America’s allies, particularly the Swiss, must take a tougher stance against companies that violate the spirit of the sanctions and continue to prop up Russia.