International Overview: Key Changes in May 2025
In May, there were a number of changes in the foreign economic sphere and in the recognition of court decisions – let’s look at the most important of them:
- Sanctions Regime Tightening
The European Union introduced its 17th sanctions package targeting Russia’s “shadow fleet” and several companies, including oil and gas as well as industrial enterprises. The list also includes judges and prosecutors accused of “human rights violations.” Britain has synchronized its restrictions with those of the EU.
Further tightening measures are expected soon: possible new limitations on Nord Stream pipelines and a reduction in the price cap on oil exports. Additionally, the EU is considering measures to protect European companies from investment arbitration claims related to seized Russian assets.
- Trends in International Disputes
An English court lifted anti-suit injunctions, allowing a Russian company to continue litigation against German banks in Russian courts. This decision reflects growing influence of Russian anti-injunction measures, particularly when defendants have assets in Russia.
In another case, an arbitrator resigned following an appeal by the Prosecutor General’s Office in a dispute over €7.5 billion claim against Russia. The tribunal suspended proceedings, which might set precedent for similar disputes.
- Recognition of Foreign Judgments
Russian courts show contradictory practices. On one hand, they enforced an arbitral award worth €1.26 million in favor of a Dutch company despite its “unfriendly” status. On the other hand, an Estonian firm was denied recognition of a Singaporean arbitral ruling citing violation of public order.
- Hong Kong as New Jurisdiction for Businesses
Starting in May, Hong Kong allows redomiciliation of foreign companies. This opens opportunities for tax optimization due to double taxation avoidance agreement with Russia. However, opening bank accounts remains challenging, forcing businesses to explore alternative options.
- Rising Demand for Currency Regulation Consultations
Strengthened control over foreign accounts led to increased demand for advice regarding reporting requirements. Reminder: until June 1st, information about funds movement must be submitted if account balance exceeds ₽600 thousand. Exemption applies to accounts in EAEU member states and jurisdictions automatically exchanging data with Russia.
May brought significant changes in regulation of foreign investments and sanctions policy. Businesses should take into account new risks, especially in international disputes and work with overseas assets. Trend towards stricter controls persists, yet adaptation possibilities remain available.