Recently, the U.S. Securities and Exchange Commission (“SEC”) Division of Corporation Finance issued a sample letter advising companies on their potential need to disclose direct and indirect impact of Russia’s invasion of Ukraine and the related international response on their operations. Sample letters generally do not create any new legal obligations; instead, they signal the areas of potential scrutiny by the SEC and illustrate the types of risks the SEC may view as material. Therefore, while the sample letter on the Ukraine invasion does not create any new disclosure obligations, it indicates that companies should consider the various direct and indirect impacts of the invasion on their operations and supply chains and determine whether any of these impacts are material and thus should be disclosed.

According to the sample letter, to the extent material or otherwise required, companies should provide detailed disclosure related to:

  • direct or indirect exposure to Russia, Belarus, or Ukraine through their operations, employee base, investments in Russia, Belarus, or Ukraine, securities traded in Russia, sanctions against Russian or Belarusian individuals or entities, or legal or regulatory uncertainty associated with operating in or exiting Russia or Belarus;
  • direct or indirect reliance on goods or services sourced in Russia or Ukraine or, in some cases, in countries supportive of Russia;
  • actual or potential disruptions in the company’s supply chain; or
  • business relationships, connections to, or assets in, Russia, Belarus, or Ukraine.

Further, regardless of whether they have operations in Russia, Belarus, or Ukraine that warrant disclosure, companies should also disclose any material heightened cybersecurity risks, increased or ongoing supply chain challenges, and volatility related to the trading prices of commodities due to the invasion. With respect to supply chain risks, the comments to the sample letter provide that companies should consider disclosing whether and how their business segments, products, lines of service, projects, or operations are materially impacted by supply chain disruptions, especially in light of Russia’s invasion of Ukraine. This includes discussing whether companies have or expect to:

  • suspend the production, purchase, sale, or maintenance of certain items;
  • experience higher costs due to constrained capacity or increased commodity prices or challenges sourcing materials (e.g., nickel, palladium, neon, cobalt, iron, platinum or other raw material sourced from Russia, Belarus, or Ukraine);
  • experience surges or declines in consumer demand for which companies are unable to adequately adjust supply;
  • be unable to supply products at competitive prices or at all due to export restrictions, sanctions, or the ongoing invasion; or
  • be exposed to supply chain risk in light of Russia’s invasion of Ukraine and/or related geopolitical tension or have sought, made or announced plans to “de-globalize” their supply chain.

Key Takeaways

Although the sample letter doesn’t create any new disclosure obligations, it is clear that the SEC expects companies to disclose any material impacts of the Ukraine invasion and subsequent response of the international community on their supply chains. Understanding their supplier relationships in Ukraine, Russia, and Belarus, is crucial to the companies’ determination of whether any of these supply chain impacts rise to the level of being “material.” The sample letter underscores the importance of supply chain mapping and risk assessments as companies who have these tools in place are much better positioned to identify new material risks, including those that arose as a result of Ukraine’s invasion.   


Reagan Demas has significant experience working on behalf of companies and investors in emerging markets and high risk jurisdictions. He has managed major legal compliance investigations for a variety of Fortune 500 companies and negotiated settlements before the US Department of Justice, US Securities and Exchange Commission, and other federal and state regulatory entities, obtaining declinations in a number of matters. He has also conducted risk assessments and due diligence in a variety of legal compliance matters for companies across industries, and has worked on the ground evaluating partnerships, investments and other business opportunities worldwide. Reagan has written and spoken extensively on corruption, business ethics, human rights-related legal obligations and emerging regulatory regimes.


Maxine is a member of the Litigation and Government Enforcement Practice Group and is a member of the Compliance and Investigations, and Dispute Resolution Practice Groups in our Washington, DC office. Maxine’s experience includes working as a summer associate at Baker McKenzie in 2020 where she focused on FCPA matters as well as trade, economic sanctions and US foreign investment restrictions. Maxine has previously interned for the Department of Justice’s National Security Division, Department of Defense’s Office of Military Commissions, and the Treasury Department’s Office of Foreign Assets Control. Prior to law school, Maxine worked for the Center on National Security at Fordham Law where she conducted counter-terrorism research.


Maria Piontkovska advises clients on reducing anti-corruption compliance risks stemming from operating business in emerging markets and handles internal investigations and related interactions with law enforcement authorities. Her practice focuses on global corporate compliance and investigations, as well as white collar criminal matters. She represents domestic and international corporate clients in a broad range of compliance matters, including criminal investigations, before the US Department of Justice, the US Securities and Exchange Commission, and other government agencies.