FAQs

Russia/Ukraine Exporter Webinar - 18 March 2022

Will seafood exported to Belarus as a final destination be affected as a part of possible or existing sanction measurements?

You can still sell goods into Russia and Belarus if it is not to an individual or entity identified in the Russian Sanctions Bill or current Export controls. But be cognisant of shipping delays and difficulties in completing transactions. Speak to your freight forwarder about shipping, contact your bank to understand possible complications of completing transactions and seek qualified legal advice.

Is there an estimate on when NZ sanctions will be announced (following the passing of the Russia Sanctions Act)?

Sanctions placed by New Zealand went into effect on 18 March. This first tranche of sanctions prioritises political and military individuals and entities, and extends existing sanctions on Russian President Vladimir Putin and 12 members of his Security Council to include asset freezes and prohibitions on their vessels and aircraft entering New Zealand. Sanctions may be updated and can be accessed here: Russian Sanctions | New Zealand Ministry of Foreign Affairs and Trade (mfat.govt.nz)(external link)

What advice can you provide for exporters whose previous Russian customers are trying to settle final outstanding debts but can not transact as a result of the measures through SWIFT.

Getting paid for exported goods will be more difficult. Continue to talk to your Russian partners in market, many Russian businesses will be experiencing similar issues with completing transactions and may have some practical advice.

Additionally, contact your bank to discuss if it is possible to send or receive payments within the constraints imposed by the New Zealand and international sanction regimes. You should seek qualified legal advice if necessary.

Understanding implications on NZ Sanctions on Ukraine and visibility of Russian sanctions on foreign companies in Russia.

As at 22 March, in response to these measures by New Zealand, Russia has put New Zealand on a list of 43 countries that commit so-called unfriendly acts against Russia. Measures include:

Debts from Russians to creditors from these countries can now only legally be paid in Rubles rather than foreign currency.
Citizens and companies from these countries face higher barriers when moving their capital out of Russia.
Business deals, with these countries will require approval from a commission for monitoring foreign investment, managed by the Russian Ministry of Finance.

We ship FOB to all export markets, so don't have great visibility over shipping routes/destinations. Are goods still being delivered/shipped to Russia and former Soviet States and/or increasingly unlikely?

Many of the major shipping lines have suspended deliveries of non-essential goods to Russia itself. Essential goods, such as humanitarian goods like food, are still being shipped.

While freight connections for essential goods may still be functioning, there are blockages elsewhere in the system. Measures imposed by others like sanctions, restrictions on financial transfers, and restrictions at ports may impede flows of freight.

There may also be disruptions where shipping routes go via Russia. Businesses are encouraged to find alternative routes in this case, for example, through Asia or Eastern Europe.

We have clients in Russia and former Soviet States. It would appear that many companies have bank accounts outside of Russia or their country.

The impact of SWIFT restrictions will depend very much on the precise payment arrangements in place. Banks in many countries will face similar limits as banks here do on their ability to do business with Russian banks. We suggest exporters contact their banks for advice on if, and how, payments can be received legally and within the spirit of the sanctions.

Is it possible that payments are made to & received by NZ banks - but are held-up in NZ or even returned by a NZ bank, despite no Govt sanction on the goods traded? Is this legal?

Banks are required to comply with relevant sanctions imposed by New Zealand under the Russia Sanctions Act. Banks may also comply with sanctions imposed by other countries. This means that if an individual or entity is sanctioned by another country, it is possible that banks in New Zealand will refuse to engage in transactions related to them. SWIFT restrictions imposed on Russian banks can also make international payments very challenging.

In these instances we encourage you to speak to your bank in the first instance about why a payment has been blocked and seek legal advice on options.

We understand that the G7 group is looking to strip Russia of MFN status under WTO rules. We would be keen to hear New Zealand's response to this. Anything you could share would be greatly appreciated.

The New Zealand Government passed the Russia Sanctions Act recently to build on its initial measures in response to Russia’s invasion of Ukraine, in solidarity with Ukraine and in concert with the international community.

Beyond implementing the Act, New Zealand will continue to keep other options on the table and continue to talk with partners. The Government has sought advice on options for potential trade measures as part of Aotearoa New Zealand’s sanctions approach.

Great to get an overview on impacts on global freight, commodity costs and market impacts

Many of the major shipping lines have suspended deliveries of non-essential goods to Russia itself. Essential goods, such as humanitarian goods like food, are still being shipped. Most of New Zealand’s exports to Russia are food.

While freight connections for essential goods may still be functioning, there are blockages elsewhere in the system. Measures imposed by others like sanctions, financial transfers, and restrictions at ports may impede flows of freight.

There may also be disruptions where shipping routes to countries go via Russia. Businesses are encouraged to find alternative routes in this case i.e. through Asia or Eastern Europe.

We have suspended trading into our Russian distributor at present however they have an amount owing to us for our last shipment. Interested to understand what options there might be to deal with this.

What is the likely impact on NZD vs USD and NZD vs AUD?

We would encourage you to engage directly with your bank with respect any currency strategy you may be undertaking. The short term value of the NZD is being driven by three factors at present

Commodity prices - Strength in the export prices for New Zealand’s large commodity exports typically acts a support for the strength of the NZD.
New Zealand’s interest rates relative to the rest of the world – Currently the RBNZ is ahead of most other central banks in its monetary policy tightening cycle so that puts upward pressure on the NZD
Global Risk appetite - During periods of economic uncertainty and weaker economic outlook investors tend to flock to safe-havens like gold and the US dollar. This tends to inflate the value of the USD and therefore decrease the value of the NZD

Usually weaker commodity prices usually go hand-in-hand with a weaker global growth outlook, but that is not currently case. At the moment these are pulling in different directions, which may increase the risk of volatility in the NZD while the conflict persists.

What subsidies and measures are local governments taking to leverage their increase in costs?

MFAT is currently unaware of any such measures but will continue to monitor this.

What is the volatility EUR/USD seems that US is soon going to release information on what will happen with the dollar.

We would encourage you to engage directly with your bank with respect to any currency strategy you may be undertaking. To date the EUR has experienced a weakening relative to the USD since the beginning of the year. This reflects the higher economic exposure EU nations have to Russia, (particularly with respect to energy dependence) and the direct fall out from the conflict. The impact of extended conflict and economic sanctions is likely to provide weight on the European economy relative to the US. On March 16 the US Federal Open Market Committee announced an increase in its federal funds rate of 25 basis points. Further tightening of monetary policy by the US Federal Reserve relative to the European Central Bank could also act to further strengthening the USD relative to other currencies, including the EUR.

What are the main fish affected by the bans from Russia to EU. and if possible what are the bans, tariffs?

Unlike the United States, the European Union and United Kingdom have, as far as we are aware, so far not placed any official ban on Russian seafood imports. This remains an evolving situation so further trade bans are possible.

What can still be sold to Russia if anything?

You can still sell goods into Russia if it is not to an individual or entity identified in the Russian Sanctions Regulations or subject to current Export controls. You may, however, face practical challenges. If you are unsure we would recommend you seek legal advice.

I have goods shipping from the USA to NZ which we then clip the ticket, from here they will ship to Russia. My Russian customer is aware of the difficulties shipping directly to Russia and has suggested we ship to a warehouse facility they have in Poland. I have spoken with our freight forwarder and they have advised the goods are likely to be ceased if they are affiliated with a Russian company. Order value is around $30K and will be an ongoing order if we can keep the supply chain functioning. The goods are associated with the printing industry.

The decision of what freight companies will and will not transport remains at their discretion. We would advise that you discuss this with them further. We would also advise you speak to your bank for completing the transaction to ensure payment is possible and seek qualified legal expertise.

We have exported goods from New Zealand prior to Christmas to Russia in good faith, they are arriving there next week. The importer wants to pay (or so they say) but is unable due to our bank (ANZ) being sanctioned to receive this foreign currency. This is only hurting NZ exporters. In our cases likely to lose 250,000 NZD, or pay to bring goods back to NZ for rework at a huge cost to us.

If you already have trade credit insurance, you may be protected by your insurance. Most international insurers have stopped covering new shipments for Russia, but if you have previous shipments that were made prior to the invasion, your trade credit insurer may be able to pay to you. We advise you speak to your insurer and seek qualified legal advice.

We export food to Russia, can we continue to export going forward, if we get paid before shipping? Will the NZ govt sanction the shipping lines? We have huge volumes of product here in a warehouse packaged for Russia which we remain keen to export if we are able.

Yes, you can still sell goods into Russia if it is not to an individual or entity identified in the Russian Sanctions Bill or current Export controls. But be cognisant of shipping delays and difficulties in completing transactions. Speak to your freight forwarder about shipping, contact your bank to understand possible complications of completing transactions and seek qualified legal advice.

We have recently sold technical equipment to Russia for food processing. Are we legally inhibited by NZ from providing services online or in person to assist its commissioning?

You can still provide services into Russia if it is not to an individual or entity identified in the Russian Sanctions Regulations. You may, however, face practical challenges. If you are unsure we would recommend you seek legal advice.

Can I confirm that currently the only trade restrictions for NZ companies (outside of the restrictions imposed by banks and shipping companies) are the export controls that were announced on the 25th of February in the Gazette which specifically relate to military or associated organizations?

Yes.

This first tranche of sanctions prioritises political and military individuals and entities. Sanctions may be updated and can be accessed here: Russian Sanctions | New Zealand Ministry of Foreign Affairs and Trade (mfat.govt.nz)(external link)

The Government has sought advice on options for potential trade measures as part of Aotearoa New Zealand’s sanctions approach.

Hi we have had a payment which has been made 12 days ago from Vladivostok, it has come through USA banks via swift transaction and is now being held in NZ by our bank and this is not being released, what is the process and how can we speed up this process to release payments.

Contact your bank for advice on how to resolve this. You should seek qualified legal advice if necessary.

Are you also able to share a link to the MFAT web page where the list of sanctioned entities and individuals are?

Russian Sanctions | New Zealand Ministry of Foreign Affairs and Trade (mfat.govt.nz)(external link)

[Our] bank simply will not receive the money from Russia due to sanctions. There is no conversation to be had with the bank. They are a closed book due to sanctions.

You should seek qualified legal advice.

Who do we contact at NZTE? Do we contact Simon directly or is there a generic email address for exporters to use?

sanctionsassistance@nzte.govt.nz or via the www.tradebarriers.govt.nz

What European markets could end up most at risk for NZ exporters if the conflict continues.

New Zealand companies need to be thinking about future-proofing cost structures and the cost of the market models. You need to consider that, not just from a Russia/Ukraine perspective, but also din a Europe context, and globally.

Can I just confirm that as NZ is now on the 'unfriendly country' list we can only be paid now in roubles?

As at 22 March, in response to these measures by New Zealand, Russia has put New Zealand on a list of 43 countries that commit so-called unfriendly acts against Russia. Measures include:

Debts from Russians to creditors from these countries can now only legally be paid in Rubles rather than foreign currency.
Citizens and companies from these countries face higher barriers when moving their capital out of Russia.
Business deals, with these countries will require approval from a commission for monitoring foreign investment, managed by the Russian Ministry of Finance.

What is a trade barrier?

Trade barriers take many forms, and may differ depending on whether you export goods or services. A trade barrier is any rule, administrative procedure or other government intervention that makes it slow, costly or difficult to export to a particular market. Sometimes trade barriers exist for good reasons - for example, regulations that protect public health or the environment.

In other cases, we may be able to reduce, resolve, or prevent barriers, especially where rules:

• are not transparent or clear

• are overly restrictive

• are unevenly applied or have been introduced to unfairly advantage local industries

• are inconsistent with trade rules

What are some examples of common trade barriers?

Common examples include:

• customs procedures

• requirements for goods to be locally produced

• requirements to use local assets, components or workers

• quantity restrictions (such as quotas)

• difficulty enforcing international rules and regulations

• poor protection of intellectual property rights

• licensing requirements

• limitations on access to key infrastructure

• restrictions on foreign entry or movement of people

• data storage requirements

• privacy requirements

• local presence requirements

• taxes that favour domestic over foreign firms

• restrictions on investment

• qualification requirements

• price controls

• requirements about company directors

• procurement rules

• subsidies

• product labelling requirements

• testing, inspection and certification procedures

• sanitary, phytosanitary or technical regulations and standards.

How long will it take for my enquiry to be addressed?

We aim to provide an initial response to each enquiry within 48 hours. The timeframe for tackling the particular trade barrier that you have identified will depend on the type of trade barrier and also on the willingness of the trade partner to resolve it. Some trade barriers can be resolved very quickly, while others can take many years to overcome. Occasionally, despite New Zealand’s best efforts, a trade barrier cannot be resolved.

I need assistance with my commercial strategy offshore, can you help me?

The Trade Barriers Helpdesk has been set up to deal with governmental barriers to trade. However, New Zealand Trade & Enterprise (NZTE) helps New Zealand businesses to grow internationally by providing access to market knowledge, resources and connections, as well as connections to investors and partners for growth. NZTE can be contacted via their website.

Which agencies are involved in handling my enquiry?

The Trade Barriers Helpdesk is jointly operated by the Ministry of Foreign Affairs and Trade, Ministry of Business Innovation & Employment, Customs, Ministry for Primary Industries, Education New Zealand, and New Zealand Trade & Enterprise. Once we have examined the particular details of your enquiry, we will determine which of our agencies is best placed to assist you.

What happens to my personal data and confidential information?

Our data privacy statement explains how we will use your personal data and confidential information.

Does the Trade Barriers Helpdesk service cost me anything?

The Trade Barriers Helpdesk is completely free to use, and there is no limit on the number of times you can use it.