blogs / 14 MAR 2022
Ukraine
Like so many of you, Cartus is deeply troubled by the tragic events unfolding in Ukraine. The devastation and suffering have led to a significant humanitarian crisis, especially for the nearly three million innocent civilians who have been forced to leave their homes to escape the violence. Cartus strongly supports all efforts to bring peace to Ukraine as swiftly as possible.
Among the displaced citizens fleeing Ukraine, many are valued employees of our client base, and we have been inspired by the measures our clients have taken to support local Ukrainian employees and their families as well as their expatriate population. Cartus is likewise committed to supporting our global clients as they exercise their duty of care and generosity towards those affected.
Duty of Care: Ukraine
Travel Implications
Cartus is proud to have helped our clients find secure and vetted temporary accommodation for over 400 families in the last two weeks with the support of our supplier network in multiple countries—a partnership for which we are exceptionally grateful.
Some clients have decided to send their expatriates home permanently or to new assignment locations. Household goods shipments out of Ukraine are not possible at this time, and it is reasonable to expect loss or damage to belongings in the host property; hence, some companies are considering providing funds for expatriates to replace furniture and personal belongings.
While corporations are still determining what ongoing support will look like for displaced local employees and their families, the European Union (EU) has taken steps to protect Ukrainian nationals as well as third-country nationals or stateless persons benefitting from international protection in Ukraine and their families by invoking the Temporary Protection Directive. This exceptional measure provides immediate and temporary protection to displaced persons from non-EU countries and ensures the right to stay for one to three years in an EU member state, the right to work, as well as access to education, housing, and medical assistance.
Financial Implications
In addition to securing and covering costs for emergency temporary accommodation:
Some companies are providing support by extending salary advances, purchasing gift cards, or organizing delivery of groceries and essential household items for displaced Ukrainians.
We have also seen many clients grossing up cash allowances, where possible, to maximize cash in pocket to displaced employees.
Some clients are also providing stipends to employees in other countries who are sheltering displaced Ukrainian families.*
As the situation in Ukraine intensifies, it is not possible to predict when or if it will be deemed safe for Ukrainians to return home; consequently, companies are assessing the duration and extent of ongoing support.
For expatriates who have had to leave Ukraine, most companies are continuing to support temporary living costs as well as expatriate allowances for 30-90 days and will review ongoing support after that.
Duty of Care: Russia
Travel Implications
With most embassies/governments recommending or strongly advising foreign nationals to leave Russia while commercial travel options are still available, the vast majority of our client base has been engaged in actively evacuating expatriates and their families from Russia.
Travel options are becomingly increasingly limited after more than 30 countries closed their airspace to Russian airlines, and Russia responded with a reciprocal ban.
Aeroflot halted all international flights except for Belarus as of March 8, and Russia’s second largest airline, S7, cancelled all international flights from March 5.
Most recently, Kazakhstan’s national airline, Air Astana, and Turkish budget airline, Pegasus, temporarily suspended flights into and out of Russia. Turkish Airlines has said flights to and from Russia will continue “for the moment.”
Air Serbia is, at time of publishing, still operating and has added capacity to their Russia routes.
Remaining flight options to UAE, Azerbaijan, Qatar, Armenia, and Israel are in high demand and extremely expensive. Flights to China and Indonesia, halted during the pandemic, will resume March 14.
Land routes to countries bordering Russia via train and bus are currently oversubscribed, and rental cars are in very short supply—nor can rental cars typically be driven over the Russian border. Some clients are providing cars and drivers to employees trying to reach bordering countries as well as a car service to meet them there.
Estonia has suspended the processing of tourist visas for Russian nationals except for a few exceptional situations such as for those seeking medical assistance.
We recommend checking government websites for up-to-date travel advisories and entry requirements**, including confirmation of which COVID-19 vaccines will be accepted for entry. Some countries, such as Finland, do not recognize any of the four approved Russian vaccines: Sputnik V, Sputnik Light, EpiVacCorona, or CoviVac.
Shipment of household goods into and out of Russia has been severely impacted by shipping companies halting trade in region. Online surveys are recommended for speed, and transit times will be very extended. Pet shipments and air shipments are also impacted by the severe reduction in available flights.
Some companies are providing vacant property management services to satisfy lease and insurance conditions, while others are considering moving household goods into storage. Cartus’ local supplier network is actively supporting our clients with departure and ongoing property support.
Displaced families with school age children will have to address go-forward schooling needs. Cartus’ education partner, Bennett International, has provided guidance for families that fall into these two groups:
Local Ukrainians whose children were in public/state schools in Ukraine and who are now crossing the border into neighboring countries in large numbers, especially Poland
Expatriate families and senior-level employees of international businesses in Ukraine, Russia, and Belarus who are being relocated to several countries in the region, or repatriated to their home countries throughout the world
Please see link for further detail: Bennett International Post-guidance for Families
Financial Implications
Cartus is also analyzing ongoing and new payments to customers and supplier partners to ensure compliance with bank and other sanctions. Where companies are exiting Russia, we have been able to temporarily take over ongoing payments to expatriates and suppliers to non-sanctioned bank accounts.
Similar to the approach taken for expatriates leaving Ukraine, most companies are considering temporary extension of expatriate allowances for 30-90 days. Clients who are suspending or exiting commercial operations in Russia are terminating assignments and sending employees home or to different locations.
* As with all employee benefits, it is important to check with your tax advisor to determine taxability treatment for ad-hoc allowances and services. ** Travel Advisories and Online Resources
*Watch-out*
The US government has warned that dual role US/Russian nationals should exercise caution, as their US citizenship may not be recognized, preventing their departure from Russia.
Clients are exercising caution around providing support to assist local Russian employees depart Russia. In addition to the challenge of finding travel routes out of the country, immigration compliance needs to be carefully assessed, and it should be considered that immigration policy may change with little or no notice. The following European countries have suspended processing of visas for Russian nationals: Czech Republic, Greece, Iceland, Latvia, and Lithuania. Please consult with your immigration vendor or legal counsel before making plans to evacuate Russian nationals.
Access to funds may also present challenges, since a new law was passed limiting Russian citizens from taking more than $10,000 USD in foreign currency out of the country. On March 8, Russia suspended the sale of foreign currency; and it will not be possible to buy foreign currency until at least September 9, 2022. Over the next six months, Russian citizens with foreign bank accounts may withdraw up to $10,000, in USD only.
With the help of global legal resources, clients are taking careful consideration and review around the appropriate duration of support for local Russian employees—for example, is it temporary or permanent, and what support will be provided if the employee wishes to return home in the future?
So far, most corporations who have suspended or exited Russian operations permanently are continuing to pay their local employees to minimize hardship and maintain their legal obligations. It is anticipated that there will be intense competition for talent if the much-discussed “brain drain” takes place with highly qualified individuals seeking exit routes that may include pursuing new career options.
Cartus and Realogy
Cartus does not have a physical presence or employees in Ukraine or Russia, but we are committed to supporting our clients’ efforts to provide emergency assistance to employees in both countries through our caring and professional local supplier network while complying with all export control restrictions and sanctions.
In response to this crisis, our parent company, Realogy, has opened a fundraising campaign for the Red Cross with 100% of contributions supporting the people of Ukraine, including civilians who have been displaced from their homes.
Cartus, with the support of our tireless supplier network, is committed to providing guidance and immediate practical support to our clients, and we will keep you informed as the situation changes.
Note: The information presented in this blog was accurate at the time we went to press. As the situation in Ukraine and Russia is changing rapidly, please consult your Cartus account manager or other trusted sources for the most up-to-date information. You may also email cartussolutions@cartus.com to connect with a Cartus representative.
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Tracey Rennie
