June 1, 2022 3:13 PM EDT

In the early weeks of the war on Ukraine, an unprecedented number of firms announced they would cease operations in Russia as an act of protest against the invasion. But announcing a departure and actually shutting down business in a modern G8 economy are quite different animals. One of the companies that announced a withdrawal was TMF Group, which offers compliance and administrative services to corporations that want to do business internationally. It has 125 offices around the world, and provides services in Ukraine and Russia, where, among other things, it has helped foreign companies invest in Russian bonds.

In February CEO Mark Weil announced that TMF Group be wrapping up any work with Russian clients, and would not take on any new clients who wanted to work in Russia but would continue to serve existing clients who were doing business in Russia. But it has been more complicated than he thought, partly because of the maneuvers companies have made to camouflage their Russian origins, partly because different nations have different rules about sanctions and ceasing operations and partly because it’s not always easy to find out who really owns a company. He spoke with TIME about how his firm is managing the process.

(This interview has been edited and condensed for clarity.)

It has been about three months since you announced your exit from Russia. How’s it going?

The sanction side is the easy bit because we have no choice; it’s a legal process. The much harder bit was the decision I took that if you’re a Russian UBO [Ultimate Beneficial Owner, the term for the entity who actually controls or derives the benefit from the company’s operations] we want to exit. Having now worked on it for the last month, the definition of who’s a Russian and who’s a UBO turn out to be not so clear. Each jurisdiction has different definitions of a UBO. Sometimes you get a German public company, which has a minority Russian shareholder, so it might have been their company, but they’re no longer technically the UBO. Or they’ve got lawyers advising them on how they transfer the ownership to friendly but non-Russian parties. That “derussification” process can be perfectly legitimate and the company no longer has much to do with Russia. It could also be a kind of smokescreen, not really affecting the UBO; it’s a technical maneuver with clever legal advice. We’re not a law firm, and to unpick that is quite complex.

And then the ‘who’s a Russian?’ bit is also quite fraught. I believe the Dutch government is introducing a law about our industry not working with Russians, but they’ve said if they’ve got a dual passport, they’re not Russian anymore. I think it’s too simple a test. There’s the whole question of what do you do about somebody with multiple passports, or indeed, who no longer has a Russian passport, or may not even be Russian but made their money in the regime, or is a Russian but is a dissident. About 80% are pretty clear cut; we’re not going to hang around. Maybe 10% are sanction cases and that’s again clear, you have to freeze [their assets.]. And then about 10% we’re putting through a process, which I chair, where somebody in our firm locally can say I think this client deserves a fair hearing. It’s not an easy process. We’re not the Court of Human Rights. And we have to do it at some pace, and try and make decisions we can live with on the basis of the evidence we have, but it’s quite onerous.

Read more: As Starbucks Exits Russia, Another Symbol of American Capitalism Fades

Both my parents were refugees to the U.K. So saying, ‘Sorry, you’ve got a Russian passport, you’re done’ feels a little bit harsh. One of our clients was a reasonably high profile dissident and I wouldn’t feel terrific saying to that person, ‘You’re out.’ I think it was the right thing to do. In some ways, it’s a useful exercise. But I will say if lots of governments around the world started saying, ‘you mustn’t do business with clients who look like this or have this kind of passport,’ I hope they’ve thought it through because it’s really not easy to do it correctly and fairly and legitimately.

Have you seen a lot of exits from Russia among your client base?

No, and they may be making those decisions. It takes time. There’s often quite a slow process, if they did decide to unwind from Russia.

There have been reports of the exodus of elite, educated Russians. I wondered if you’ve seen any?

Yeah, we’ve seen some of that. One of the complications of the process is that nobody is standing still. They’re not stupid. Since [the Russian invasion of] Crimea in 2014, a lot of Russians saw what was coming and did things to act upon the sanctions that appeared at that point, and they’ve been acting on them since and have acted on them again with this impetus. So it’s like shooting a moving target. I say, ‘O.K., we’re exiting Russian [firms]’ and you say, ‘Well, wait a minute, they’re about to sell to a French or German or British concern or they’re winding down their shareholding.’ So do we exit or do we wait a few weeks to see whether they actually deliver on what they say? If you’re a big Russian conglomerate bank, there’s not so much you can do. If you’re Gazprom you’re Gazprom. But quite a lot have taken actions to no longer be deemed a Russian UBO. It’s obviously to do with access to banks and markets and whatever. That’s a very real thing. And we are trying to manage it by asking ‘O.K., if the client says they are taking legitimate action to no longer be part of a Russian enterprise, do we agree it’s legitimate? By when will it have happened? Are we willing to wait to confirm that they do it? And when’s the drop dead date?’ That’s what we’re running through.

How do you tell if they have legitimately disinvested from Russia?

If somebody’s clearly putting in place clever structures and intermediaries that aren’t Russian, and there’s a structure in the British Virgin Islands and so on, we would absolutely still want to exit. Unfortunately, every situation so far has been different. They have some quite clever, imaginative advisors helping them and part of our problem is to form a view in a sort of court of common sense: is that a fundamental ‘goodbye to Russia’ in their ownership structure? Or does it look more tactical, reversible, and just to get around sanctions? I don’t have a rulebook for that. There’s a small number, typically that middle tier of corporates who aren’t so obviously part of the Russian state, where we’re working hardest to stay on top of what they’re proposing and whether we think it passes the sniff test. What we’re trying to get at is who’s actually owning and controlling that business; who’s really making the decisions? And I could hire lawyers to figure it out, but then we’d still be here next year.

Has it been a big financial impact on your firm?

It’s bearable. We had to do something for our colleagues in Ukraine. Is it more costly than I thought it would be? Not really. I mean, there’s an opportunity cost because rather than spending my time working out how we serve our clients, better grow the business, invest in digital data, all the exciting stuff, I’m running a process on the negative to say, why shouldn’t we exit this client? We have 125 offices around the world or so. Each one could have a Russian client. Managing the process is not something I want to do regularly.

Have there been anything unintended consequences, anything that you didn’t expect?

One complexity is that obviously not everybody respects everyone else’s sanctions. We have a Russian client in Hong Kong. We say ‘Ah, they’re on the U.S. sanctions list.’ Well, Hong Kong doesn’t recognize U.S. sanctions so they don’t care. So we say ‘well, we kind of do.’ So we still exit but essentially for convenience.

Read more: Why Sanctions on Russia Won’t Work

So they’ll just find a local Hong Kong compliance firm?

Actually, that’s an interesting point. My view is that we’re a regulated company, we have a pretty rigorous KYC [Know Your Customer standard]. If we’re rejecting a Russian client, how can they then just go somewhere else? There ought to be some policy that says if they’ve been rejected by one of you, that’s the kind of if not a red card, at least a yellow card. If we exit a Russian client in say, the Netherlands, the risk is they just end up setting up their own stall, looking after themselves in a rented office by the canals, and nothing much has been achieved. I think there’s a sort of bit of catch up required on the policy side.

Do you think the sanctions are having any effect?

In the area that we are dealing with, which is more to do with making life harder for those who got wealthy off the regime, I think it’s having some effect. Those are the people who are used to being wealthy and traveling the world and having all the benefits and services of Western economies can provide—we’re one of those—and my sense is taking that away might only be an irritant, but the accumulation of irritants is what leads to pressure. I understand that a number have gone to Dubai or wherever, so they’re just moving, and you could argue it’s tokenism. I think it goes a bit beyond that. Friends of mine who are Russian and in business are pretty caught up about the reputational impact of Russia and their standing in countries where they they’ve made their lives.

Say I am a rich Russian. What have I not been able to since being sanctioned?

You can’t do anything; your money or assets are frozen. And they’ve sanctioned plenty. I think that’s had a very dramatic effect. I wouldn’t want to miss that. The number that we’re monitoring is about 1,700 named parties. That’s quite a lot of wealthy Russians. Relative to the lifestyle those people are likely to have had, it is highly constraining. Now, whether they had backup plans, I wouldn’t know, but the impact on lifestyle, the ability to spend, to buy stuff, to use money, is greatly constrained. And we’re just going a step further and saying we think there are others who may not be sanctioned, but look a bit like people who are part of this because they’ve made their money [from the regime]. Our actions I think are not anything like as consequential if you believe they can just walk across the street to find another provider. But it’s not always that easy to do that because it takes time and we’re a regulated sector. So I would say it’s potentially a significant encumbrance to doing business.

Read more: How Sanctions on Russia Will Hurt—and Help—the World’s Economies

Of the ones that you have stopped doing business with, what have they done?

It’s still quite early because there’s a formal contractual obligation to give notice. In some jurisdictions, we actually have a fiduciary duty to find a replacement. You can’t just walk away, you have to find a willing counterpart. So that really does blunt the impact of what you’re doing. I come back to the question of how more jurisdictions taking action is helpful because if the jurisdiction says we’re stopping it, then it is stopped. What I’m doing is more of a gesture. We have to give them a fair notice. We have a legal duty of care not to cause chaos contractually so there is a there’s a process we have to follow.

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