The activity surrounding the Ukraine crisis during the past several months has shown that sanctions can be imposed rapidly in response to changes in the political climate. However, that flurry of sanctions activity has slowed during the past month, providing a good opportunity to assess how your business landscape has changed because of the sanctions—and what you can do to adapt to those changes.

1. Be Aware of Sanctions Relevant for Your Business

The Ukraine sanctions have had a noticeable impact in many sectors of the Finnish market, however, it is good to remember that other sanctions programmes also exist and can have a real-life impact. The penalties for violating any of sanction can be significant, and there are many more sanctions programmes in force than just those concerning Ukraine. The EU and the US each have approximately 30 separate sanctions programmes in force at the present time.

You may be caught by surprise of the range of business transactions that are restricted or forbidden by sanctions under various circumstances. Sanctions touch on a wide variety of activity. Although prohibitions against doing business with specific individuals or companies have been well-publicised during the Ukraine escalation, other restrictions on certain types of business activity (such as providing services or certain goods even if the counterparty is not sanctioned), tend to receive less attention in the media.

Older sanctions programmes, such as those concerning Iran and activities linked to terrorist organisations in various countries around the world, have a broad reaching effect but receive little if any press attention. Importantly, enforcement actions by EU Member States and the US authorities include an investigation of whether the violator knew or should have known that their conduct violated sanctions laws.

Also, it is good to keep in mind, that other countries (such as Canada, Australia and Switzerland) have also imposed their own sanctions. Although EU and US sanctions may be for many Finnish enterprises the most likely applicable sanctions programmes, it is good to be aware that other authorities can and do impose sanctions of their own.

2. Determine if Planned Business is Affected by Sanctions

If you believe that a business transaction that you have planned could be affected by sanctions, there are some steps you can take to protect yourself against liability—both in case of a sanctions-triggered dispute with your counterparty, as well should an official investigation occur.

The US authorities have a history of threatening civil or even criminal prosecution against foreign companies when those companies are believed to have caused US persons to violate US sanctions laws. Knowing as much as possible about the connections of personnel and companies involved in your transactions will improve your ability to determine whether your business plans might need to comply with EU or US sanctions, or perhaps on some occasions with both.

3. Prepare Your Strategy to Prevent Violations and Get the Deal Done

Prepare a plan of action to address the risks and to protect yourself against liability. Documenting your efforts to perform an appropriate due diligence sanctions check may prove useful in the future should the need arise to demonstrate that you performed the level of due diligence which the circumstances called for, e.g. in case of an official investigation. It may also be helpful to prepare internal training and education programmes to ensure that your employees are able to identify and address possible sanctions issues. Depending upon the nature of particular situations, it may be beneficial to seek an official clarification or approval of business activities from the authorities. It is also possible in some cases to apply to the authorities for a special license to conduct business which may otherwise be prevented by sanctions restrictions. You may also wish to review your transaction agreements to ensure that they contain language which offers you the maximum protection in the event that the restrictions imposed by existing sanctions, or new sanctions which could be imposed in the future, restrict or prevent the performance of those transactions.

Kristina Rutsky

Latest references

We have advised S-Bank Plc in four bond transactions totalling EUR 1.45 billion that provided financing for S-Bank’s acquisition of Svenska Handelsbanken AB’s Finnish private customer, asset management and investment services operations. In 2023, we advised S-Bank in supplementing their earlier bond programme and in the issuance of two new bonds. S-Bank’s first covered bond, valued at EUR 500 million, was issued in September 2023. In addition to general corporate purposes, the purpose of the issue was to finance the acquisition of Svenska Handelsbanken AB’s Finnish private customer, asset management and investment services operations. Further, a EUR 150 million senior preferred MREL eligible bond was issued in November 2023 and the purpose of the issue was to meet the minimum requirement for own funds and eligible liabilities (MREL) and to finance the bank’s activities. In 2024, we have advised S-Bank Plc in the update of a EUR 3 billion bond programme. Under the programme, S-Bank may issue senior preferred MREL eligible notes, covered bonds and additional tier 1 capital notes. In February of 2024, we advised S-Bank in its issuance of a EUR 300 million senior preferred MREL eligible bond and on the tender offer of its EUR 220 million senior preferred MREL eligible bond maturing in 2025. The tender offer required the prior permission of the Finnish Financial Stability Authority based on Commission Delegated Regulation 2023/827 on technical standards for the reduction of own funds and eligible liabilities prior authorisation. The Stability Authority granted S-Bank a permission for repurchases of the notes. Based on the permission, S-Bank replaced the notes with own funds or eligible liabilities instruments of equal or higher quality at terms that are sustainable for the income capacity of S-Bank. The final tender offer results were announced in February 2024. In April 2024, we further advised S-Bank in supplementing their base prospectus and issue of their second covered bond of EUR 500 million. The covered bond’s maturity date is 16 April 2030.
Case published 30.7.2024
We act as the lead legal counsel in the groundbreaking case of Multitude SE’s (Multitude) proposed relocation from Finland to Switzerland. The first phase of the relocation, involving the transfer of Multitude’s registered office from Finland to Malta pursuant to SE Regulation, was successfully completed on 30 June 2024. In this connection, Multitude’s shares were removed from the Finnish book-entry system and the issuer central securities depository of the shares changed from Euroclear Finland Oy to the CSD operated by the Malta Stock Exchange. In practice, all of Multitude’s shares are now held through Clearstream. In Malta, the company is anticipated to be converted into a public limited liability company under Maltese law, following which it will seek redomiciliation from Malta to Switzerland. Given that Finnish legislation does not allow for direct relocation to a non-European Economic Area country such as Switzerland while preserving the company’s legal personality, the process necessitated a multi-jurisdictional strategy as outlined above. Our mandate encompasses advising Multitude on all aspects governed by Finnish law concerning the proposed relocation and coordinating the work of local legal counsel and various other advisors involved in the project. The process also involved a written procedure to amend Multitude’s existing subordinated capital notes and senior bonds to facilitate the relocation as well as placement of EUR 80 million senior guaranteed notes by a newly established Multitude Capital Oyj. ”The transfer to Malta marks a significant step in Multitude’s journey. This pioneering and complex process has been successfully implemented with the invaluable support of our own team and advisors. Castrén & Snellman has masterfully orchestrated the entire project, ensuring seamless coordination across multiple jurisdictions. We look forward to achieving our next step with the further relocation to Switzerland”, says Jorma Jokela, Multitude’s CEO. Multitude is a fully regulated growth platform for financial technology, employing over 700 individuals across 25 countries. Its shares are listed on the regulated market (Prime Standard) of the Frankfurt Stock Exchange.
Case published 1.7.2024
We acted as legal advisor to OP Finland Infrastructure LP in its investment in ESL Shipping Ltd, a Finnish shipping company. Varma Mutual Pension Insurance Company co-invested in the company. The investment was made against new shares in ESL Shipping, and  the EUR 45 million co-investment  corresponds to a  21.43 % holding in the company. The aim of the investment is to accelerate ESL Shipping’s green transition. ESL Shipping Ltd is a Finnish shipping company. Its main shareholder is Aspo Plc. OP Finland Infrastructure is a fund investing in Finnish infrastructure. The fund is managed by OP Financial Group. Varma Mutual Pension Insurance Company is a Finnish pension insurance company. In September 2023 the value of its investment portfolio amounted to EUR 57.5 billion. 
Case published 26.4.2024
We are acting as the legal advisor to Purmo Group Plc in Project Grand Bidco (UK) Limited’s voluntary public cash tender offer for all the issued and outstanding shares in Purmo Group. The tender offer values Purmo Group’s total equity at approximately EUR 392 million. Project Grand Bidco (UK) Limited is a special purpose vehicle incorporated and existing under the laws of England and Wales that will be indirectly owned by a consortium formed for purposes of the tender offer of certain affiliated funds of Apollo Global Management, Inc. and its subsidiaries, and Rettig Oy Ab. The consortium intends to support the development of Purmo Group with industrial expertise, and the planned tender offer is expected to accelerate the implementation of Purmo Group’s growth strategy. Purmo Group’s class C shares are listed on the official list of Nasdaq Helsinki. Purmo Group is at the centre of the global sustainability journey by offering full solutions and sustainable ways of heating and cooling homes to mitigate global warming. Purmo Group provides complete heating and cooling solutions to residential and non-residential buildings, including underfloor heating and cooling systems, a broad range of radiators, heat pumps, flow control and hydronic distribution systems, as well as smart products. The completion of the tender offer is subject to the satisfaction or waiver by the offeror of certain customary conditions on or prior to the offeror’s announcement of the final results of the tender offer. The tender offer is currently expected to be completed at the end of the second quarter or at the beginning of the third quarter of 2024.
Case published 26.4.2024