Audit Giant EY Joins Other Big Four Firms Exiting Russia

London - Auditor EY became the third of the Big Four accounting firms to sever ties with its Russian operations on Monday, following KPMG and PwC and adding to the list of major professional and financial services companies exiting the market as war rages in Ukraine.

The firm, formerly Ernst & Young, said it is restructuring its Russian subsidiary to separate it from its global network. The consultancy also said it will no longer serve Russian government clients, state-owned enterprises or sanctioned entities.

"This is not something we take lightly. This is heart-breaking," the auditor said in a statement. "The resulting suffering of this conflict across Ukraine, Eastern Europe and elsewhere is deeply concerning to all of us at EY."

The company said it has 4,700 employees in Russia, where it has been active since after the collapse of the Soviet Union in 1991.

Amid warnings of damage to reputations resulting from continued ties to the Russian government, more financial services companies and credit card companies are suspending operations in Russia and Belarus. Western governments have imposed sanctions designed to isolate the Kremlin's financial infrastructure from global markets. 

Law firms too are pulling out of the region as the war intensifies.

Magic circle law firm Freshfields Bruckhaus Deringer LLP also said on Monday that it has cut ties with Russia's VTB Bank. And another big law firm, Norton Rose Fulbright, said Monday that it will no longer take new instructions from Russia and is reviewing whether to cut off its existing work

KPMG also said on Sunday that it will ditch its Russia and Belarus firms.

"We believe we have a responsibility, along with other global businesses, to respond to the Russian government's ongoing military attack on Ukraine," a spokesperson for KPMG International, said. "KPMG has over 4,500 people in Russia and Belarus, and ending our working relationship with them, many of whom have been a part of KPMG for many decades, is incredibly difficult."

PricewaterhouseCoopers also said on Sunday that it "should not have a member firm in Russia, and consequently PwC Russia will leave the network." The accounting giant said it will focus on the wellbeing of its 3,700 employees in Russia.

Deloitte, another Big Four player, also said on Monday that it will no longer operate in Russia and Belarus, where it has approximately 3,000 employees.

"We will separate our practice in Russia and Belarus from the global network of member firms," Punit Renjen, chief executive at Deloitte Global, said. "We will honor our commitments and obligations to global financial markets and multiple regulatory bodies."

Credit card giants Visa Inc. and Mastercard Inc. said on Saturday that they were suspending their network payments services in Russia.

Mastercard said that cards issued by Russian banks will no longer be supported by its network anywhere in the world. And cards issued outside the country will not work at Russian ATMs.

"We don't take this decision lightly," the payments company said. "Mastercard has operated in Russia for more than 25 years. We have nearly 200 colleagues there."

Visa said it will cease all Russian transactions.

"Once complete, all transactions initiated with Visa cards issued in Russia will no longer work outside the country and any Visa cards issued by financial institutions outside of Russia will no longer work within the Russian Federation," the group said.

--Additional reporting by Christopher Crosby. Editing by Ed Harris.

Update: This story had been updated to add comment from Deloitte.

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