February 7, 2023

Volume XIII, Number 38


February 07, 2023

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February 06, 2023

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SEC Issues New Guidance Regarding Russia Sanctions and Public Company Disclosures

In response to Russian President Vladimir Putin’s decision to invade Ukraine in February, the U.S. government announced sweeping sanctions against Russia. As the conflict nears the three-month mark, businesses around the world are continuing to address compliance with these sanctions. To that end, the SEC recently issued guidance on how companies affected by the Russian invasion of Ukraine should disclose how the conflict is affecting their operations, including the impact of evolving sanctions.


The guidance, posted by the Division of Corporation Finance on May 2, 2022, advises impacted companies to consider disclosure about a variety of topics, including, if material, whether they have direct or indirect operations, investments, or employees in Russia, Ukraine, or Belarus that may be affected by the war; whether they have material direct or indirect reliance on goods in Ukraine, Russia, or countries supportive of Russia; whether the war is having or is expected to have material impacts on a company’s supply chain; or whether the company has material business relationships, assets, or other connections to Russia, Ukraine, or Belarus.

The Division further advised that impacted companies’ disclosures of their financial results may need to reflect information related to the sanctions, such as whether they have impaired corporate assets, inventory valuation, or ability to collect on contracts. The SEC further noted that companies should disclose any material issues related to increased cybersecurity risks or volatility in commodity trading prices regardless of whether they have operations in Russia, Belarus, or Ukraine.

Despite the wide-ranging categories of information the Division advised companies to consider in making disclosure decisions, it cautioned that the list was not exhaustive. Companies should also consider less obvious potential material risks and impacts, such as the impact that business in Russia or Ukraine may have on the behavior of its customers. They should also be aware of MD&A requirements and disclose known uncertainties that are reasonably likely to have a material impact on the company’s results of operations or financial condition.

The ever-changing regulatory and enforcement environment created by the Russian invasion poses unique risks for companies seeking to navigate the global landscape, both in terms of their actions and their public-facing statements. Now more than ever, it is important for companies that have been or could be materially impacted by the conflict in Ukraine to continue to monitor and analyze developments, including indirect, material effects of the resulting sanctions or Finland’s decision to join NATO.  Companies should understand not just the scope of the sanctions as they currently stand, but also monitor potential further sanction developments, and their potential direct and indirect impact on all aspects of the business and industry.

We have issued client alerts on related U.S. sanctions, which are available here.

© 2023 Proskauer Rose LLP. National Law Review, Volume XII, Number 137

About this Author

Frank Zarb, Corporate Attorney, Proskauer Rose Law Firm

Frank Zarb is a partner in the Corporate Department, where he concentrates his practice on regulatory matters under the federal securities laws, as well as on U.S. and cross-border corporate transactions. He counsels public and private companies, as well as broker-dealers and other financial intermediaries, on a wide range of regulatory compliance matters, including public disclosure and preparation of periodic reports; the federal and state proxy requirements, shareholder proposals and other shareholder communications; stock exchange listing standards; and new laws and...

Louis Rambo, Corporate Attorney, Washington DC, Proskauer Rose Law Firm

Louis Rambo is an associate in the Corporate Department and a member of the Capital Markets Group. He concentrates his practice on regulatory matters under the federal securities laws and advises companies on general corporate and transactional issues, including public disclosure, federal and state proxy requirements, debt and equity securities transactions, business combinations and corporate and board governance. Prior to joining the Firm, Louis served as an attorney in the division of corporation finance with the Securities and Exchange Commission.

 Seetha Ramachandran Proskauer New York, Trial Strategies White Collar Defense & Investigations Appellate,Financial Institutions, anti-money laundering AML, Bank Secrecy Act,

Seetha Ramachandran is a partner in the Litigation Department.

She is a leading expert in anti-money laundering (AML), Bank Secrecy Act, economic sanctions and asset forfeiture matters. She represents banks, broker dealers, hedge funds, private equity funds, online payment companies, and individual executives and officers, in high stakes and sensitive matters. Her practice focuses on white collar and regulatory enforcement defense, internal investigations, and compliance counseling. In addition to her subject matter expertise, Seetha is an experienced trial and appellate lawyer,...

Julia D. Alonzo Litigation Attorney Proskauer Rose New York, NY
Senior Counsel

Julia Alonzo is a senior counsel in the Litigation Department with a focus on securities and corporate governance litigation. She is experienced in complex securities and white collar litigation matters, including federal securities class actions, derivative lawsuits, internal investigations and federal white collar defense.

Julia maintains an active pro bono practice, with a focus on immigration law, asylum and child welfare issues. In addition, she sits on the associate board of the Brooklyn Defender Services Family Defense Practice, which aims to provide interdisciplinary...

Michael Guggenheim Litigation Lawyer Proskauer Rose New York City Law Firm

Michael Guggenheim is an associate in the Litigation Department.

Michael earned his J.D. from Harvard Law School and his B.A., summa cum laude, from Rutgers University. While at law school, Michael worked for the Litigation Department of the San Francisco City Attorney, was a teaching assistant for the Harvard Law School Negotiation Workshop, and litigated election law cases with Common Cause. He also served as the Executive Managing Editor of the Harvard Law & Policy Review and coached the Boston College mock trial team....