Governments around the world have agendas and over the course of years some countries will be in favor and some will not be. In the case of Russia, a couple years ago, Russia invaded Ukraine and the war is still going on, and the European Community and others including the US placed sanctions on Russia. Many businesses sold their operations to Russian companies, some with the expectation in a couple of years we will once again be partners. Russia has a population base to sell to and in many instances the country can be profitable. The war has continued and the sanctions have not stopped the Russian government actions. What should happen?

In an article by Valentina Za and John O’Donnell of Reuters, the Italian bank UniCredit has ongoing business in Russia and is challenging the terms set by the European Central Bank for the bank to cut its exposure to Russia. UniCredit is going to the EU’s General Court to get a ruling.

UniCredit runs a retail bank in Russia, said it was seeking clarity and certainty on the actions it needed to take. Similar to most courts, the application should take a few months before the ruling.

Italian Foreign Minister Antonio Tajani welcomed the complaint, saying he shared the need for clarity. The ECB must take into account the situation in which Italian companies operate in Russia in compliance with EU sanctions. Hasty decisions merely risk damaging Italian and EU companies.

After Austria’s Raiffeisen, UniCredit has the biggest exposure to Russia where it runs a top 15 bank among European lenders. UniCredit’s bank is profitable, and it has cut its exposure from 91% ownership to 65% with further reductions planned.

The difficulties in selling its shares are there is a lack of potential buyers and Moscow imposed their restrictions. An exit has to be signed off by President Putin and Russia’s Central Bank has to give approval. Another Italian bank Intesa Sanpaolo did receive the authorizations is still trying to finalize its exit.

Linking to dividend paying stocks, often these companies operate in many countries which is good for diversification of buyers. While each country maybe similar in the sale of goods and services, each country makes their own decisions which businesses have to adjust to. Ideally in the company’s biggest market, the strategic direction of the company and government tends to compatible and as long as they are, you have few worries.

There are more questions than answers, till the next time – to raising questions.