The four leading international consultancy firms, known as the Big Four, have joined a growing list of companies that this week decided to cut their ties with operations in Russia because of the invasion of Ukraine.
PWC, KPMG, Deloitte and Ernst & Young collectively employ some 14.000 staff in Russia. The companies said ties with its Russian business will be severed, letting these operation continue but no longer as part of their networks.
“All PwC member firms outside of Russia, including PwC Luxembourg, will exit any work for Russian entities or individuals subject to sanctions,” PWC said. “This does not mean that we will not work with Russian clients or individuals, but we will apply extra scrutiny in accepting or continuing with such clients.”
Renamed
PWC said its freshly independent operations in Russia and Belarus will be renamed.
“The EY global organisation will no longer serve any Russian government clients, state-owned enterprises or sanctioned entities and individuals anywhere in the world,” an EY statement said.
“Deloitte will no longer operate in Russia and Belarus,” said Deloitte’s CEO Punit Renjen in a statement. “We will continue to prioritise the needs of our people and clients. We will honour our commitments and obligations to global financial markets and multiple regulatory bodies.”
Brochure for Russian clients
From its Luxembourg offices, Deloitte and other firms in recent years have provided extensive services to Russian clients. A September 2016 brochure that was available on Deloitte’s Luxembourg website until last week presented Luxembourg as “a gateway for Russian and CIS business in Europe” and underlined the Grand Duchy’s role as a leading investment centre, “first in Europe, second in the world after the US”.
The brochure described specific tax advantages for individuals and businesses and Deloitte’s comprehensive services, including a team of 25 Russian speakers, as well as its “strong experience and a long track record of providing high-standard services to CIS clients”.
With 2,300 staff in Luxembourg, Deloitte, which did not respond to request to elaborate on its services to Russian clients, prides itself in being one of the largest professional services firms in the Grand Duchy. PWC employs 2,900 people in Luxembourg, KPMG has 1,800 people and Ernst & Young’s Luxembourg team includes about 1,700 people.