Businesses say joint Russia trade embargo less damaging than unilateral one

A Stark Logistics truck on the road in Estonia, reportedly en route to the Russian border.
A Stark Logistics truck on the road in Estonia, reportedly en route to the Russian border. Source: Reader submission

A joint trade embargo on Russia would be far less harmful than Estonian unilaterally imposing such a measure, some business leaders say.

In the latter case, it would be easier for businesses in Russia to renege on contracts on the grounds of force majeure, and for the Estonian firms to lose out, it is argued, in addition to other border countries which had not signed up to an embargo benefiting more.

At the same time, a contradiction seems to have emerged where companies claim that dealings with Russia makes up but a small part of their overall business activity, and yet losing that business would prove detrimental to the extent of even leading to bankruptcy.

Prime Minister Kaja Kallas (Reform) has called for countries bordering with the Russian Federation to impose a common trade embargo on Russia, in the interests of making sanctions measures more effective.

Several hndred Estonian firms still have some business links to Russia, while Estonian exports to Russia. worth €50-70 million per month before the war, have not seen a decline in value, partly due to inflation.

In an interview given to ERR on Wednesday, Heiki Einpaul, CEO of Hekotek, a company which produces equipment for the timber industry, suggested that if Estonia wants to stop doing business with Russia, a complete boycott of Russia should be established via the force of law.

Einpaul added that force majeure incidents, that is circumstances which could not have been foreseen but which prevented the fulfillment of a contract, then said contract is either suspended or canceled altogether.

For Estonia unilaterally to halt all business with Russia would not make sense, Julia Gerasõmiva, CEO of Aisance Logistic, said Friday.

"We already have so many sanctions and so little work connected to Russia that if the borders are closed, we cannot do our work whatsoever, while at the same time, other countries could," she told ETV news show "Aktuaalne kaamera."

Heiki Einpaul noted that contracts are not moral documents as such.

Marie Allikmaa, head of the business and consumer environment department of the Ministry of Economy, said that Estonia had submitted a proposal at EU level in 2022 to consider a full trade embargo, but this had not met with sufficient support.

Nonetheless, a pan-EU embargo remains the most effective solution tot he current situation, she said; since it is now clear there will not be unanimity among the EU 27, the next best option is to talk to Finland, Latvia, Lithuania and other border nations in the region.


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Editor: Andrew Whyte, Marko Tooming

Source: 'Aktuaalne kaamera,' reporter Toomas Pott.

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