The Russian invasion of Ukraine is a significant humanitarian crisis that has far-reaching global implications. Supply chains are experiencing substantial disruptions as sanctions affect energy, food, and materials used to sustain production of key technologies. Russia and Ukraine are among the world’s largest commodity exporting nations, with global sway over critical natural gas, oil, metals, and agri-commodities. If this crisis is prolonged, it will have a significant impact on Europe’s energy supplies as well as on many countries’ food security concerns.
Interdependence: A side-effect of globalization
This is yet another reminder of the interdependence that comes with globalization and our mutual
reliance on one another as participants in the global supply chain. There are 14,745 Tier 1 and 7.6 million Tier 2 supplier relationships with Russian entities globally, according to data from Dun & Bradstreet. As a result, we are witnessing the ripple effects of US, UK, and EU sanctions on Russian businesses, further crippling an already fragile global supply chain.
There are at least 390 businesses globally with critical suppliers in Russia. Critical suppliers, for the purpose of this article, are defined as suppliers that provide goods and services of at least $100,000 and account for not less than 5% of all invoices. The top five countries that have critical suppliers in Russia are the US, China, India, Japan, and the UAE. There are at least 210 businesses globally with critical suppliers in Ukraine. The top five countries with the most exposure the US, Mexico, China, Brazil, and Canada.
Currently 348 entities are under direct sanctions in response to the invasion of Ukraine, which actually represents 36,082 businesses whom are owned or controlled by them, according to Dun & Bradstreet data. The OFAC 50% rule imposes sanctions on businesses with a combined ownership by sanctioned parties of 50% or more. In addition to causing financial disruptions to the ultimate parent companies in Russia, sanctions would also disrupt entities in other countries who have business relationships with the sanctioned companies. This underscores the need for beneficial ownership data and the importance of having access to corporate family tree data in uncovering hidden compliance risks.
Read more at: https://economictimes.indiatimes.com/small-biz/trade/exports/insights/russia-ukraine-crisis-can-indian-exporters-fill-the-gap-in-the-global-commodities-market/articleshow/91880818.cms
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