Sanctions May Harm eCom SaaS Tech
If you have a Shopify App, or an Adobe Commerce plugin that has ties to Belarusian or Ukrainian-based technology company, take heed. You may soon need to find a replacement for that technology due to new, and forthcoming, sanctions.
The well-being and the livelihood of those Ukrainians affected by the conflict, and the innocent Belarusian and Russian citizens who have nothing to do with the invasion, are our deepest concerns here at Future Commerce. But the attention of Western businesses who have technological dependencies on apps based in Eastern Europe will soon turn to that of risk mitigation, assessment, audit, and replacement.
Here’s why:
The background on sanctions
The U.S. Commerce Department, in cooperation with the Department of State, and the Bureau of Industry and Security, have instituted sweeping sanctions against Russia in response to their invasion of Ukraine. The sanctions, or Export Administration Regulations (EAR), tighten exports on companies doing business with Russia. Existing, similar, sanctions also govern Belarusian financial institutions due to their material support of the war.
While it currently covers exports, more aggressive restrictions are placed on software and technology businesses — including a section on not maintaining software updates to civil end-users. This may cause domestic corporations like Microsoft to control the access to code management platforms like Github and cloud platforms like Azure to businesses dealing in technology with Russia or its allies.
Corporations that provide user experience and feature functionality for eCommerce sites are located in Belarus and Ukraine. The trend began 15 years ago with a large Open Source legacy, and a strong LAMP-stack foothold in Poland, Belarus, and Ukraine. Around that population of labor, businesses that powered Magento and WordPress stores, like Aheadworks and Amasty, grew up and eventually began to power the larger footprint of cloud-enabled eCommerce. Many operate on private clouds and bare metal licensing services, some of which may exist within Eastern European borders.
Who is impacted
Eastern Europe is home to a large population of technology businesses and a highly-skilled workforce that power a non-trivial amount of eCommerce, on which Shopify, Adobe, BigCommerce, and Salesforce implementations depend.
Today, those businesses have workers directly in harm’s way. I myself have colleagues at Rightpoint who are employed nearby to Kyiv. What’s worse, even those outside the immediate area of conflict, in neighboring cities and states like Minsk, Belarus, may be impacted by new sanctions imposed by the U.S. and other countries in response to Russian aggression.
From here sanctions only tighten. The longer Russia plays the aggressor, the more restrictive it will become to do business with Belarusian companies. Should Kyiv fall, a new Russian-governed Ukraine itself may become subject to sanctions. What does this mean for U.S.-based eCommerce businesses? If you have a plugin or app you may be at risk.
We’ll continue to monitor, and pray for the well-being of those in harm’s way and for a swift end to the conflict.
— Phillip
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