The increasing impact of sanctions on business is worrying 80% of commodity traders, financiers and their insurers according to a Clyde & Co poll.

The poll found that a lack of clarity over how to comply with sanctions on Russia is causing the majority (62%) of businesses to shy away from certain transactions and lose out competitively. Over half (53%) of participants agreed that sanctions impede their ability to conduct legitimate trade.

Unpredictability, the impact on the bottom line of business, and the speed of implementation, are the aspects of sanctions that are causing the most concern.

“Lack of predictability is a real issue for traders who will have multiple trades at various stages of completion when sanctions bite,” comments Clyde & Co partner John Whittaker.

“Rule changes are typically enacted with no notice and have instant effect so they create significant contract and compliance uncertainty for everyone involved in the value chain.”

The outlook for growth in Russia and Ukraine has materially deteriorated as a result of the crisis and subsequent sanctions. The EBRD’s latest Regional Economic Prospects report foresees growth in the region slowing to 1.4% in 2014 from 2.3% in 2013: a large drop from January’s forecast growth figure of 2.7%.

“The sheer complexity of multi-sector, multi-regime sanctions creates a level of fear that mean companies put some trades into the ‘just too difficult’ category,” says Whittaker.

“Businesses need to become much more engaged with sanctions if they are to avoid inadvertent breaches and sidestep the unintended consequences of sanctions on legitimate trade.”