U.S. States Have Rules For Trade With Russia Too

As Venable LLP reports, several U.S. state governments have enacted laws or executive actions that restrict companies in their jurisdictions from doing business in Russia or Belarus due to the ongoing aggression against the Ukraine.

Examples of state actions include:

• New Jersey, which has banned its state agencies from doing business with companies closely linked to the governments of Russia or Belarus. The governor also ordered a mandatory review of state contracts, including those with “businesses that invest directly in … companies [owned or controlled by the government of Russia, Belarus, or their instrumentalities], directly or as subcontractors.” A new state law also prohibits state agencies from doing business with entities or persons determined by the state to be “engaged in prohibited activities” in Russia or Belarus, including those with close links to the governments of Russia or Belarus or headquartered in Russia.
• California, which requires contractors with projects valued at more than $5 million to affirmatively report to the state their compliance with federal economic sanctions.
• New York, which has directed state agencies to refrain from contracting with entities “conducting business operations in Russia” and to request certification from bidders regarding operations in Russia as part of the procurement process.

MSCI recommends keeping close tabs on how state and local governments are handling this crisis and will keep reporting on state actions as they develop.