– Wex and Idexx won't say whether they'll suspend doing business in Russia – Press Herald

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The Maine-based companies will say only that they will abide by the sanctions imposed by the U.S. and Europe because of the invasion of Ukraine.
As companies around the world suspend operations in Russia over its war on Ukraine, two major Maine companies that do business there would not say whether they will do the same.
Both Wex, which works with Lukoil, the Russian-owned oil company, and Idexx, which sells veterinary supplies and water-testing tests, wouldn’t go beyond statements saying that they will comply with U.S. sanctions on doing business with the country.
Companies that have said they will suspend operations in Russia include Ikea, H&M stores, Boeing, Airbus, Netflix, Apple, Dell Technologies and three large motion picture distributors. Google and TikTok also blocked Russian state media channels from their platforms.
Wex said that “as a matter of policy, we do not comment on, or disclose information about, individual customers or business partners.”
Wex is a payment processing and IT company headquartered in Portland. One of its products is a charge card for use at gas stations operating under the Lukoil brand – the Russian oil company that has about 200 gas stations in the United States, primarily in New York and New Jersey, although many are franchises owned and run by Americans.
Westbrook-based Idexx’s links to Russia include its veterinary supply and practice management tools along with water-safety testing kits. Last week, a spokeswoman said the company had no comment on its operations in Russia, but this week it put out a statement saying it was committed to and concerned for the health and safety of its employees, customers and suppliers in the region, as well as the pets of those people.
They also said the company foundation would contribute to International Medical Corps, an organization that provides aid to people and families impacted by the conflict, but it had no further comment on its operations in Russia.
But the swift imposition of sanctions by the U.S. and Europe show that sanctions have come of age as a foreign policy tool, said Matthew Botsch, an assistant professor of economics at Bowdoin College in Brunswick. He said the impact on Russia will be harsh.
Russia needs foreign currency to buy imported goods, Botsch said, but the unified stance of the U.S. and Europe is cutting off its access to outside currency.
Oil and gas remains “basically the only way Russia can get its hands on foreign currency,” he said. If the U.S. and Europe stop buying Russia’s oil and gas, as some are urging, that will leave China as the only major buyer. Russian oil and gas already is selling at a deep discount, primarily to China, because of cutbacks in buying by the U.S. and Europe, he said.
Russia itself has a relatively small economy and its trade with the U.S. is just a fraction of the business the U.S. does with China, Botsch said. In 2021, the U.S. exported $6.4 billion in goods and services to Russia and imported $29.7 billion from Russia. Both figures are miniscule compared with U.S.-China trade, but the ability of the U.S. to convince Europe to go along with the sanctions makes them a more effective tool, he said, because Russia’s trade with Europe is much stronger.
“They are heavily dependent on imports,” Botsch said of Russia, and “the sanctions have been much harsher and more effective than anybody anticipated.”
In the past, sanctions were somewhat less effective because countries kept actual foreign currency on hand. But with most financial transactions being done electronically, Botsch said, other countries were able to quickly freeze assets Russia had in those countries, many of them held in electronic accounts. That meant that the sanctions had a more immediate and far-reaching impact, he said.
Botsch said some of the pain of cutting off trade with Russia will be felt by Americans, who are already seeing an impact in sharp jumps in oil and gas prices, but inflation in the U.S. will be much less than what Russians will face. He also said Russia is likely to face a recession later this year that will be deeper because of the sanctions, imposing a further penalty on the country for its invasion of Ukraine.
But the sanctions have upended business plans for companies around the globe. Companies rushed to confirm that they would comply with the sanctions – in most cases, they had no choice – and some vowed to further restrict their operations as a show of support for Ukraine.
Russia countered the sanctions by temporarily restricting foreign investors from selling their assets in Russia, complicating any corporate plans to pull operations out of the country.
Oil and gas companies nonetheless said they were stopping their partnerships with Russian state-owned companies, and Toyota said it was halting production at a plant it owns in St. Petersburg. It said the production stop was caused by supply chain disruptions and also put out a statement saying it had “great concern for the safety of the people of Ukraine.”
Mercedes-Benz suspended exports to Russia and halted its manufacturing in the country, a move mirrored by Volkswagen Group, while Volvo stopped its deliveries and Ford suspended its operations.
Harley-Davidson halted motorcycle shipments to Russia, but some other companies took more limited steps and indicated that the sanctions will have a big impact on their operations. For instance, Renault said it was suspending production at its plant in Moscow for only a few days, because of “logistics issues.” Russia is Renault’s second-biggest market.
And Carlsberg, the Danish brewer, said it was suspending production at its three brewereries in Ukraine, but said operations in Russia would continue. The company said it felt obligated to “protect the livelihood of all our employees” in Russia.
This report contains material from The Associated Press.
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