Western Sanctions Pressure Baker McKenzie To Cut Ties With Kremlin Clients

International law firm Baker McKenzie is closing its Russian offices in response to Western sanctions aimed at weakening the country’s war efforts in Ukraine. For more than three decades, the firm has worked with major state-controlled Russian companies, including weapons manufacturers, big banks, and energy titans, according to a Pandora Papers investigation.

In 1989, two years before the fall of the Soviet Union, Baker McKenzie opened its first office in Moscow. It was the first Western law firm to set up shop in the region. The firm quickly developed a reputation for “safeguarding” and “supercharging” Kremlin-linked Russian companies, according to the International Consortium of Investigative Journalists (ICIJ). It considered itself a “go-to” for Russia’s largest companies and major foreign investors, according to its website.

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In 2016, Baker McKenzie offered tax advice to Gazprom, Russia’s stated-owned gas company. During the same year, it helped Rostec, a state-owned weapons enterprise that manufactures Kalashnikov rifles and fighter jets, to sell its shares of a large copper mine in Mongolia. In 2018, the firm won a contract from Russia’s second-largest state-owned bank, VTB, dubbed “Putin’s piggy bank” in the Panama Papers. Reports revealed that members of Putin’s inner circle were using VTB to offshore “vast sums of money,” according to the ICIJ.

More than 12 other major firms, including the Chicago-based Sidley Austin, London-based Linklatters, and New York-based Skadden, Arps, Slate, Meagher & Flom LLP, are also cutting their Russian ties after the Ukraine invasion. In 2017, Sidley lobbyists met with a State Department official to advocate for their then-client, VTB, regarding how sanctions brought on by Russia’s annexation of Crimea were hurting the bank. Linklatters had represented various state-owned Russian enterprises, including Gazprom and VTB. Skadden has represented two Russian oligarchs close to Putin, each worth more than $1 billion.

Some wonder whether Baker McKenzie’s announcement is just lip service. Over the past decade, Baker McKenzie has won more than a dozen contracts with sanctioned Russian companies. Ethics experts have indicated that while Baker McKenzie followed sanctions laws in the past, it “sidestepped the spirit” of them, according to ICIJ.