Business community reacts to conflict in Ukraine
The Greater Birmingham business community has been reacting to Russia 's invasion of Ukraine, which has sparked outrage globally and had a significant impact on international trade.
The conflict in Eastern Europe, which has entered its sixth day, has prompted western countries including the UK to impose tough sanctions against Russian banks, firms and private individuals.
A vigil took place in Birmingham city centre on Sunday night, with hundreds of people turning out in Victoria Square in solidarity with Ukraine.
Russia 's invasion has also had huge implications on trading conditions, with fuel prices rocketing and the value of the Russian rouble plummeting.
Henrietta Brealey (pictured), chief executive of Greater Birmingham Chambers of Commerce, said: “Many across the business community will be united by their sense of shock and horror at Russia 's invasion of Ukraine.
“War in Europe is not something many of us thought we 'd see (or see again) in our lifetimes. Our thoughts are with the people of Ukraine and their loved ones the world over whose lives have been utterly devastated by this crisis.
“Throughout the coming weeks the Chamber will be working to connect our members to the latest intelligence on emerging situation and support them in unpicking the implications for local businesses.
“We are currently working with our expert members and patrons to produce bitesize briefing videos and resources on key areas and would encourage impacted or concerned Chamber members to contact your relationship managers to share your needs. ”
Price hikes inevitable
A political economist at Birmingham City University has warned the conflict will inevitably mean the UK is hit with further price hikes around fuel, gas, wheat and vital minerals used in manufacturing processes.
Associate Professor Steven McCabe said: “Ukraine, like the country invading it, has huge natural resources. Since the fall of Communism, we 've become used to a steady supply of raw materials and basic foodstuffs from Russia and former 'satellite ' states including Ukraine.
“Ukraine is the 'breadbasket ' of Europe. The tensions in the Eastern European region has caused the price of wheat to soar by 20 per cent. This will translate into higher prices for basic foodstuffs including bread and pasta.
“Additionally, Russia and Ukraine export a number of vital minerals including aluminium, copper, nickel, platinum, and palladium - the trading price of which have all increased and will inevitably cause prices of finished goods to rise.
“Unfortunately, given we 're in a cost-of-living crisis, conflict with Russia, even if only economic, will punish all UK citizens as much as it hurts ordinary Russians.
Cyber threat
Meanwhile, businesses in Greater Birmingham have been warned the conflict could put them at a heightened risk of cyber attacks.
Ukrainian banking and government websites were knocked offline last week by a spate of distributed denial of service (DDoS) attacks, which are designed to crash sites by bombarding them with excessive requests, causing server overloads and shutdowns.
UK and US governments claim the attacks were carried out by Russian-backed military hackers - prompting concerns that a similar virtual onslaught could be attempted in a bid to disrupt British firms.
Mike Wills, director of strategy and policy at cyber and data security firm CSS Assure, which has an office at Colmore Square, said: “From a strategic perspective, there is a significant risk that Russia may seek to create instability within western countries and, specifically, the UK as a means to distract focus and attention away from the situation in Ukraine and onto closer, acute problems at home.
“In this day and age, this is easier to achieve virtually by means of cyber attacks. To achieve instability and distraction, we may find attacks targeting services that we rely on heavily on a day-to-day basis, such as health, banking, utilities, water, transport infrastructure and supply chains.
“Critical national infrastructure should be relatively hardened to attacks and they will, more than ever, be at a heightened state of vigilance. The attackers know this and, therefore, may be looking to find less obvious routes to target these institutions - potentially through suppliers, which are typically easier to hack. ”
Financial sanctions
Legal experts say businesses need to stiffen their efforts to ensure that who they are transacting with - including intermediary financial institutions through which funds may pass - are not subject to newly imposed sanctions on Russia.
In the UK, five banks and a number of individuals are subject to financial sanctions - with more expected to follow.
Stacy Keen, senior associate at law firm Pinsent Masons, said: “In broad terms, UK persons - incorporated entities, nationals and those in the UK - are prohibited from making funds or economic resources available to these targets.
“Nor can they accept such funds or resources from them. These prohibitions also extend to dealings with businesses that are directly or indirectly owned or controlled by these targets. ”
“Many UK persons would have already been reluctant to deal with these new UK targets, and businesses that they own or control, because most were already the subject of US sanctions.
“Those that provide material assistance, financial, material, or technological support for, or goods or services to or in support of, US sanctions targets can themselves be designated as sanctions targets.
“Many UK businesses - and those operating across the globe - will have contractually undertaken not to deal with US sanctions targets even if they have no touch points to the US. Such clauses are a common feature in agreements with banks, insurers and counterparties with a footprint in, or links to, the US.
“The OFSI has shown its willingness to take action against UK persons that transfer funds to UK sanctioned financial institutions even if the end-beneficiary of the payment is not subject to sanctions.
“It imposed a fine just this week on payments provider Clear Junction Limited in relation to a series of transactions it said contravened the existing UK Russian sanctions regime. ”