Events in Ukraine, US Sanctions, and the Russian Response

Dear Clients,

By now you've probably seen the news that Russia has invaded Ukraine. It's a cause of sadness and concern for us all, as it disrupts the European peace that has stood for 75 years, and it undermines the rule of international law.

The community of developed democratic nations have promised a variety of economic sanctions against Russia and the elite which operate its levers of power. As yet these have not been announced but include the possibility of the complete isolation of Russia from the international settlement systems on which international trade in currencies and securities depend (the SWIFT system, for those who are familiar with its role in global finance).

The Russian government has likewise threatened retaliation for economic sanctions, especially ones as crippling as the most severe that are currently being contemplated. While Russia cannot symmetrically injure the community of developed democratic nations' economic welfare, it has demonstrated its facility with and willingness to use cyber methods to disrupt information systems at financial intermediaries like banks and payment systems.

Please know that we are monitoring the situation, and especially the Russian response to potential sanctions. American banks and financial institutions, and especially goodstead's bank and custodians have robust cybersecurity and recovery programs to protect their clients' assets from these types of actions. Should Russia make good on its threats, it is not likely that our bank and custodians will be impacted, but if they are, they will likely recover in a matter of days.

I would also encourage you to make certain that you monitor communications from your own banks and financial institutions for information on how to protect your assets, and what measures they are taking to ensure your access to funds. It's also always a good idea to have a reserve of cash on hand should your access to your funds be temporarily hindered. I don't recommend that you make any large withdrawals, but cash for a couple of days of living expenses should suffice.

In May of 2021 Russian cyberhackers also successfully targeted an oil pipeline company in the United States, driving up the cost of oil and disrupting supplies to refineries that produce gasoline. These are also likely targets for cyber-attack. Should they go offline, panic may make gasoline temporarily unavailable through runs on gasoline stocks. If you need to travel, and if your gas tank is on the low side, it may behoove you to fill up over the next couple of days.

These are merely suggested precautionary measures, should not inspire worry, and are by no means likely to be necessary. Still, the events that may necessitate them are within the realm of possibility. Should you have any questions or need anything from us, we are always available and ready to help.

Thanks, and all the best,

goodstead