EY and Deloitte have followed their rivals and fellow big four accountancy firms KPMG and PwC by cutting off businesses in Russia and Belarus.
The businesses will not necessarily close down but they will be legally separated, in the latest example of multinational firms responding to the invasion of Ukraine by pulling out of Russia.
KPMG has more than 4,500 workers and partners in Russia and Belarus, while PwC has 3,700, EY has 4,700, and Deloitte has 3,000. KPMG and PwC confirmed that the businesses would no longer be able to use their brands or name once separated.
Companies around the world have been scrambling to work out their exposure to Russia after the US, EU and UK sought to isolate it economically with sanctions. None of those three have imposed blanket bans on Russia or Belarus, which supported the invasion by its bigger ally, but many firms have judged that reputational or financial risks were too great.
Sanctions have also made it illegal for US, EU or UK companies to serve some of the biggest Russian businesses, including banks such as Sberbank, Gazprombank and VTB.
Many services companies such as accountants, consultants and law firms have large Russian operations that had served big businesses, but that has now come under threat. The consultancy Accenture said last week it would close its Russia office, while McKinsey and Boston Consulting Group said they would suspend client work there. Linklaters, a “magic circle” law firm that has carried out work for Russian state-owned companies, said it would close its Moscow office.
In a statement on Monday, EY said Russia’s invasion of Ukraine was “shocking and abhorrent”. The EY Russian operation would be legally separated and EY would not serve “Russian government clients, state-owned enterprises or sanctioned entities and individuals anywhere in the world,” it said.
“This is not something we take lightly. This is heartbreaking as we have over 4,700 colleagues in Russia, who have been a part of our global network for over 30 years and worked side by side with our global, eastern European and Ukrainian colleagues.”
Deloitte, the last of the big four to announce such a move, said in a statement: “We will separate our practice in Russia and Belarus from the global network of member firms. Deloitte will no longer operate in Russia and Belarus.
“Like others, we know our colleagues in Russia and Belarus have no voice in the actions of their government. We will support all impacted colleagues during this transition and do all we can to assist them during this extremely difficult time.”
Jon Holt, the chief executive of KPMG UK, said in a social media post on Sunday evening that the firm had decided to “terminate the small number of contracts that KPMG UK has that are related to individuals or entities that are controlled by the Russian state, or closely connected with the Russian regime”.
A spokesperson for KPMG International said: “We believe we have a responsibility, along with other global businesses, to respond to the Russian government’s ongoing military attack on Ukraine.”
The decision to leave behind the Russia and Belarus networks was “incredibly difficult” but is “a consequence of the actions of the Russian government”, the statement said.
Bob Moritz, PwC’s global chair, said he was “shocked and horrified by the senseless war that the Russian government is inflicting on Ukraine and its people”.
PwC said: “As a result of the Russian government’s invasion of Ukraine we have decided that, under the circumstances, PwC should not have a member firm in Russia and consequently PwC Russia will leave the network.”
