Global Consultancies Navigate Sanctions Tightrope in China

Amid escalating geopolitical tensions, major global consultancies like KPMG and Bain & Co. are finding risky ways to conduct business in China. These maneuvers test the limits of Western sanctions and China's increasing restrictions on foreign involvement in sensitive sectors, creating significant compliance and reputational risks.

Amid mounting geopolitical tensions, global consultancies such as KPMG and Bain & Co. are pushing the boundaries of compliance to maintain their foothold in China. These strategies, involving work for sanctioned Russian banks and leveraging intermediaries, are raising eyebrows among industry and legal experts.

Since 2023, consultancies like KPMG have assisted Russia's Sberbank in China while navigating a complex web of sanctions and regulations. Despite these efforts, legal risk and compliance challenges loom large as the U.S. and other Western nations tighten sanctions, especially after Russia's 2022 invasion of Ukraine.

In a landscape where China's regulatory environment is becoming more restrictive, consultancies are attempting to balance opportunities against potential threats of violation and reputational damage. Many are resorting to innovative solutions to sidestep barriers, highlighting the contentious interplay of international business, politics, and law.

(With inputs from agencies.)