“The COVID-19 crisis and the constitutional amendment vote to extend the presidential rule are two major political events on the table in Russia,” says Ella Omelchenko, Counsel at Clifford Chance in Moscow.
In general, Omelchenko reports, people have adapted to the new life, as have corporations and businesses. “The crisis will be a major topic for some time in the future, and its impacts will obviously be big and long-lasting," she says. "We will need to find a way to overcome the situation, not only economically, but technologically too, in the way we work and live.”
“Local authorities have adopted a lot of new laws, such as regimes of self-isolation, for example,” she says. “These laws, which were adopted as a substitute for the classic quarantine, were imposed after the federal government empowered local authorities and encouraged them to implement measures locally.” Otherwise, she reports, the Russian Government implemented the same kinds of public-health measures that other countries have, such as travel bans, airport- and seaport-closings, and limitations on movement.
Ultimately, she reports, the slow-down or cancellation of projects that were in the planning stages earlier in the year will end up costing billions. Jobs are being lost as a result. “Many construction projects we worked on are not able to guarantee that they can keep as many people employed,” she says. “They will have to adapt to the situation and change the way they work. People older than 65 are still not allowed to go out or work. Stringent health-care requirements will stay in effect for a long period, and all employers will have to comply with cumbersome but still unavoidable measures.”
Omelchenko reports that a slow-down in investment is obvious, and she says that companies are currently focused mainly on reconsidering, reshaping, and restructuring. “The situation will affect pretty much all businesses, but it’s difficult to say which ones will sustain the most harm. It depends on the industry. The Real Estate market will be completely reshaped and largely impacted, as will the Health and Pharma industries, which have to fight through a lot of new regulations.”
According to Omelchenko, “the M&A market is also going through a rather slow period. Investors are reconsidering their investments, although some ongoing projects that started before the COVID-19 outbreak are continuing, as their termination or suspension may be even more expensive in terms of additional costs and losses. They too might have to be restructured, but at least they are still there.”
And, she says, lawyers are staying busy. “The legal industry has successfully overcome the situation,” she says. “It generally adopted so many opportunities. The need for personal meetings and head to head communication, as well as the general need for people to communicate in business, led to more contemporary technological measures – which work just fine. We had a very successful meeting with colleagues from all over the world recently, and it was almost more convenient than before.” Count her among the believers that “the unique experience and a complete change to the way people work will continue to exist even after the crisis is gone.”