In light of the ongoing and escalating situation unfolding across Ukraine and the surrounding region, we hosted a live information session for clients with several Weichert subject matter experts in such areas as global client services, international household goods and global finance.
These experts were joined by some of our valued supplier partners — Intermark Relocation and Newland Chase — to provide a more holistic understanding of what is happening on the ground.
The goal of this discussion was to offer insight into the impact of the conflict on expatriates and local populations, and better understand what we can do from a mobility support perspective.
This is a fluid, quickly evolving situation, but the information presented here was current as of our broadcast on March 2, 2022. You can listen to the full recording using the player below, download the Mp3 here, or play the episode using your preferred podcast platform (Apple Music, Spotify and iHeart, to name a few). You may also scroll down for an overview of the salient points presented by each speaker.
Irina Yakimenko (based in Moscow) | Intermark Relocation
Beginning February 24, we started to see a lot of clients as well as embassies and consulates, very quickly moving their population onto the western part of Ukraine, particularly Liev, which has become the most populated and congested location in Ukraine. Before the invasion, rents were skyrocketing amid very limited housing, but now people are offering their spaces for free to ensure that everyone has a place to sleep. We’ve been placing people in shared hotel rooms, but our recommendation is to look at the temporary accommodations just outside of the city which is still deemed relatively safe and where there are more accommodation options.
All borders with neighboring EU countries continue to be open, with people able to leave by land – car and road transportation only. Currently, the Hungarian border is the easiest to access, but the situation is very fluid as things change. While the withdrawal of cash was severely limited, ATM cash withdrawals are still available, and many supermarkets have started offering cash withdrawal options at the counters. Online banking has also been restored.
Internet, although unstable, is still available. TV channels can, at the moment, only be streamed through the internet.
The situation in Russia remains very, very tense. There are a lot of protests going on, with a lot of people are getting arrested, virtually on a daily basis. Over the weekend, up to 10,000 people were arrested in Moscow alone.
As well as ex-pats trying to leave, we have a major wave of Russians also moving out or finding ways to move out, and companies are trying to support both. In terms of leaving Russia, there are very limited air flight connections available with the EU closing airspace and the US closing airspace. The key hubs for people leaving are the Middle East and Dubai.
In Russia, because there is no emergency state, the force majeure clause cannot be enforced in tenancy agreements. So, to get out of a tenancy agreement, proper notification should be served, with either one month or three months’ notice and any rent due. We see generally two approaches from clients: one is closing down the leases, packing their things, and leaving. And the second part is just evacuating the families, and keeping the leases, essentially putting the assignment on hold to see how things play out over the next month or so.
As technology becomes less stable, and as more and more websites become unavailable, we strongly recommend VPN to be installed for any employees on the ground.
Jason Rogers | Newland Chase
There have been a lot of changes from day to day, and especially during the last week in terms of what options are available and which countries, for those trying to depart, can be entered by people from Ukraine. The mass movement out of Ukraine started around February 24 or so. Since that time, it’s been estimated that around 600,000 Ukrainian nationals and third-country nationals living in Ukraine have departed the country. We’re seeing a huge flux at the border of Poland, Hungary, Slovakia, and Romania; I’m not sure that any one country can ever be prepared for that influx of evacuees and refugees showing up at their borders.
Border officers have been extremely accommodating in most situations. Passports are the preferred method of proof that we are advising travelers to carry, but we have seen anything in terms of medical records, birth certificates, marriage certificates, anything linking the traveling party back to Ukraine has generally been accepted by any of the border countries.
What is the immigration process or immigration status of the individuals who are entering any of these land countries?
Initially, we were seeing mostly refugee status being given to these individuals. This would allow them to be registered and to remain in their destination country legally until the situation in Ukraine has been resolved. But over the weekend, we saw the EU Commission really start taking up this crisis in a more formal way. There is a temporary protection order that has been part of the EU regulations since 2001. It’s an order that has never been invoked, but we think it’s very close to being passed. If this protection order comes into being, it will grant EU rights to Ukraine nationals who are entering into one of the EU member states. These individuals will be able to apply for legal status and automatically be given the right to work in these locations. The status will initially be granted for one year. And then it’s expected that every six months that residential legal status will continue to be imposed as long as the Ukraine crisis has continued to unfold. A final decision is set to be made on Thursday, but as of right now, the Ukrainian third-country nationals who are entering are being given refugee status, which gives them legal status to remain in that destination country.
If the EU protective order is not passed, we will continue to review each country on a case-by-case basis, and we recommend clients that follow the immigration processes that those destination countries have in place.
What happens to those Russian nationals who are looking to depart Russia as well as third-country nationals who may be in Russia? And what are their immigration options?
With the airspace closed to so many EU countries, the destinations are limited in terms of where Russian nationals or third-country nationals can depart to. We are seeing a lot of interest in Turkey and so we are offering a lot of assistance in assessment planning for Turkey and some of the other Middle Eastern countries as well.
We’re also seeing countries starting to announce that applications filed by Ukraine nationals will either be receiving either priority in terms of getting renewed first or with a faster processing time. So, if the Ukraine nationals can make it out of Ukraine, we’re starting to see other options open up for countries outside of the EU for those individuals. What we’re seeing our clients focus on now is the more immediate safety needs of their employee populations in Ukraine and in getting them to safer locations.
Kyriako Bouris | VP Global Transportation Systems, Weichert Workforce Mobility
At the moment, there are no household goods activities within Ukraine. Crews are not going out packing, loading, delivering – everything is on pause right now, and we see no end in sight to that to that approach.
Within Russia, in speaking with the various agents that we partner with, it’s business as usual, and they are still packing and loading shipments. In many cases, they’re returning them to the warehouse if the customers are no longer in the country. In other cases, they’re continuing to transport goods, but there are challenges with reduced airlines, so they’re having to choose from steamship lines. But Maersk just announced that they will no longer be stopping at Russian ports. That is an additional challenge, and other steamship lines are doing the same thing, so now you’re reduced to land transport and trying to get that into mainland Europe. We’re seeing shipments travel into Germany and then depart from there. The issue is the costs that are associated with that, and the additional transit times since your traditional travel routes are no longer an option.
All these factors are increasing costs significantly. One of our partners is reported 300-400 times the normal rate for land rate.
The other development is an inability to get paid. We’re seeing freight companies requesting cash in advance of transporting the household goods.
Another consideration: there are a lot of male Ukrainian freight and household goods drivers within Europe. They make up a very large group of drivers, and that workforce has come back and Ukraine to fight; we’re estimating anywhere from 10,000- 12,000 drivers. That depletes an already challenged driver shortage that exists, and we only expect that to get worse as time goes on.
The effects of the sanctions that have been imposed are also unknown. From a household goods perspective, how are those going to translate long term? Nobody has a clear, concise answer to that, but it’s something that we’re certainly looking at very closely.
AJ Pilato | Weichert Workforce Mobility
In terms of banking in Russia, it remains business as usual, until March 25 when the sanctions are officially going to effect. At that point, 80% of the big banks in Russia will cease, and will be unable to receive monies from the United States.
From a business perspective, we’re going to be stopping on March 18. That gives us a chance to get the rates valued back from the bank and the trades. So, because we sometimes have to wait days to get rates back from the bank, it’s going to be a slower process. And then at that point, we won’t be able to make any payments. So, what a lot of suppliers and people are doing within countries is moving to the other 20% of the banks.
We also are unable to make payments into Belarus or Ukraine. Trading for those currencies has stopped. We are continuing to monitor Kazakhstan. Our client service teams are reaching out to those suppliers and transferees. We’ve identified a list to make alternative arrangements or work with them on the planning around how they’re going to get their money, whether it might have to come through payroll from the client, or through other means.
If I’ve learned anything in the last couple of days, it’s this is a fluid situation it could change. Over the weekend, Swift was taken down, then not really taken down, so it’s safe to say that almost everything remains uncertain.
As your mobility partner, we will continue to keep you updated with information that may impact your program and will help you support the safety and wellbeing of your employees across Eastern Europe. For more information, please listen to the full recording of this live event or reach out to our team.