US bans accounting and consulting services to Russia

11 May 2022 2 min. read

In a new sanctions package announced on Sunday, the US Department of the Treasury banned the provision of US-based accounting, management consulting, trust and corporate formation services to any individual located in the Russian Federation.

The professional services ban – which comes into effect on June 7 – did not include legal services, though a White House official said sanctions could eventually include legal services as well.

Secretary of the Treasury Janet Yellen said in a Sunday press release that the professional services ban “increases the pressure on the Kremlin and cuts off its ability to evade sanctions imposed by the United States and our partners.”

The UK also recently banned accounting and consulting services provision to Russia. The European Union has seen a similar initiative blocked by Hungary.

US bans accounting and consulting services to Russia

The Big Four accounting firms – PwC, Deloitte, EY, and KPMG – all announced plans to sever ties with their Russian member firms in March in response to the invasion of Ukraine.

The Big Three strategy firms – McKinsey & Company, Bain & Company, and Boston Consulting Group – in March said they would immediately cease work with Russian state entities (or had previously done so) and would suspend new work in the country.

The Big Three said they would fulfill their contractual obligations on in-progress work with Russian private entities. The June 7 deadline could put a hard finish to legacy contracts that are still being serviced by McKinsey et al, if any remain.

The Sunday announcement also included new sanctions against board members of three Russian banks – including Gazprombank, which was previously spared because of fears over the disruption of gas exports to Europe – as well sanctions against a state-supported weapons maker and three state-controlled TV stations.

The US also announced new export controls on industrial engines, bulldozers, boilers, motors, fans, and ventilation equipment, as well as the imposition of visa restrictions on 2,600 Russian and Belarusian officials.