Some Russian nationals working for technology companies in the U.S. have gotten caught up in the tit-for-tat measures following Western-led sanctions against Russia in response to the war in Ukraine, which Russia calls a “special military operation.”
“I am a Russian citizen and a U.S. green card holder (resident), working at Cisco in San Jose. This week I received an email from my employer notifying that my RSU vesting will be paused until further notice,” the verified Cisco professional said in early March on the professional social network Blind, referring to the restricted stock units some tech workers earn.
Cisco reportedly told the Russian national in the U.S.: “Effective March 2, 2022, U.S. companies can no longer engage in share transactions with Russian citizens residing within or outside of Russia, unless expressly allowed by the Russian government.”
Cisco’s new policies resulted from the Russian President and authorities’ countermeasures after Western-led sanctions hit the country in February.
Another email the Cisco professional said the company sent them reads:
On February 28, 2022, Russia’s President issued Decree 79 on special economic measures in connection with the U.S. imposed sanctions and then again, on March 2, 2022, imposed further countermeasures under Decree 81 (which took effect on March 1 and 2, 2022, respectively).
Russia’s Decree 79 prohibits Russian residents from receiving proceeds from selling any shares or cash dividends into U.S.-based brokerage or bank accounts, plus other capital controls.
Some technologists expressed concern the cash salaries that Russian nationals earn in the U.S. and the West may be affected next.
“Technically, how the Russian contra-sanction is formulated, you won’t be eligible for a salary too. They forbid Russian citizens from having any transactions on foreign accounts. That includes RSUs, direct deposits and so on,” a verified Amazon professional said on Blind.
According to the legal database JD Supra, Decree 79 also stipulates: “As of March 1, 2022, Russian residents are prohibited from crediting foreign currency to their accounts in foreign banks and other financial institutions and from transferring money without opening a bank account through foreign payment service providers.”
Decree 81 requires financial transactions between Russians and foreigners receive permission from a government commission for foreign investments. The global law firm Orrick notes: “Russian residents are essentially prohibited from purchasing or receiving shares in U.S. companies (or any other companies incorporated in any country imposing sanctions on Russia).”
The email Cisco sent affected employees continues:
Under these sanctions, U.S. companies cannot issue shares to Russian residents, unless expressly allowed by the Russian government. The term Russian residents includes Russian citizens (regardless of whether they are working inside or outside of Russia) and foreign citizens working in Russia with a valid permanent Russian residency permit (“вид на жительство” in Russian).
As such, until the Russian government lifts these restrictions (and assuming no others are imposed), these countermeasures will affect all Russian residents and will impact all stock related plans (including RSUs and the Employee Stock Purchase Plan (ESPP)). Refer to Decrees 79 and 81 for more details.
The American multinational networking and telecommunications conglomerate has also taken similar action at its subsidiary companies.
“Working at appdynamics, and got the same email from Cisco regarding my ESPP,” a verified professional at Cisco-owned AppDynamics said on Blind, referring to their participation in Cisco’s employee stock purchase plan.
The AppDynamics worker continued: “Followed up about my RSUs and they confirmed they are also affected” by Cisco’s interpretation of Russian law.
Cisco has suspended its restricted stock units and employee stock purchase programs for Russian nationals in its U.S. offices to comply with Russian sanctions against the U.S. and its Western allies. Tech workers at Cisco in the U.S. reported their stock-based compensation had been affected in March on the professional social network Blind.
Also published on Teamblind's Blog