Difficult relationship
No need to beat around the bush: the relationship between Russia and the Western world has been and remains very difficult. Just think of the situation surrounding the downing of flight MH17, which killed 298 people (mostly Dutch) in July 2014. Russia no longer wants to negotiate with the Netherlands over its liability for bringing down that flight, to the disappointment and anger of the Netherlands. Nevertheless, there are still the necessary trade relations between Russia and the Netherlands and between Russia and other Western countries. That the world's largest country by area is a huge market is where many products still find their outlet, moreover, is evident.
Machines most exported
The above table from the Central Bureau of Statistics shows that chemical products and machinery and transport equipment the most exported products from the Netherlands to Russia are. The vast majority of the goods we import are gas. As a result, we have overall a negative trade balance with Russia. Were we to get our gas from somewhere else, the trade balance would actually be extremely positive.
Sanctions list
So there are sufficient opportunities on the other side of the former Iron Curtain. But those who want to make the most of these opportunities should certainly also have an eye for the dangers. If you want to do business in Russia, it is therefore first of all extremely sensible to check the list of sanctions view imposed on Russia by the European Union. These include capital market restrictions against some Russian state-owned banks and large Russian state-owned companies in the oil and defence sectors. There is also an export ban on certain equipment, technology and services for deepwater oil exploration and production, Arctic oil exploration and production and shale oil projects in Russia. On the website of the Netherlands Enterprise Agency (RFO) can find the full list of sectors, companies and individuals you are not allowed to do business with.
Credit information on Russian companies
Despite those limitations, that still leaves more than enough opportunities. But when doing business in Russia, it is even more important than usual to know exactly who you are trading with. The problem with this is that because of a conversation on transparency, it is not easy to find information about companies. Xolv has a collaboration with a partner that has its own information database in Moscow and Credit information reports on Russian companies provided. Our partner is also a specialist in insuring trade receivables from Russian buyers. Something that is certainly not an unnecessary luxury, we know from experience.
In short: do you want to do business in Russia? We certainly do not advise against it, because opportunities abound. But we do advise you to exercise caution and tread carefully. Xolv and our partners are happy to help you in selecting creditworthy buyers and in securing your trade receivables.
