As the tragic conflict in Ukraine continues to unfold, Australian investors have fallen under pressure to divest from Russia due to the Commonwealth’s strict sanctions against Vladimir Putin’s increasingly war-weary nation.
This includes super funds.
And while Australian investments in Russian assets represent only a relatively small proportion of the sector’s $3.5 trillion superannuation system, the FSC is eager to ensure investors practice strict compliance with divestment, or else risk potential repercussions from the government.
Shortly after the Russian military invasion of its geographical neighbour, the Morrison government joined other Western nations such as the United States and the United Kingdom in imposing sanctions intended to deter Russia’s leadership from continuing or intensifying its attack.
The sanctions are designed to starve Russia’s economy through means of attrition and provoke internal Russian civilian resistance to further military aggression.
The move from the Morrison government means that Australian investors with stakes in Russian assets are being forced to offload their assets, but due to the unprecedented nature of the situation, super trustees and fund managers have been left bewildered by the federal government’s strict requirements.
As such, the FSC has released detailed guidelines on how investors can untangle themselves.
According to the FSC, the guidance covers what constitutes a ‘Russian Asset’ — steps to be taken by superannuation trustees, issues in relation to ownership and control, and how the investment process will achieve divestment.
CEO of the FSC, Blake Briggs said divestment of Russian assets complements a range of Russian sanctions imposed by the Australian government.
“The guidance supports superannuation trustees implement sanctions, cease new investments, and divest from Russian assets,” Mr Briggs said.
“By providing guidance, we aim to ensure that divestment occurs in a way that is consistent with the best financial interests of members and trustees’ legal and fiduciary obligations.”
The guidance can be accessed here.
