The ongoing tensions between the European Union and Russia over the crisis in Ukraine are creating obstacles for Irish exporters to Russia, according to the Ireland Russia Business Association (IRBA).

IRBA, the non-profit which promotes trade links between the two countries, hosted an event with Gerard MacCarthy, Enterprise Ireland’s Russia director at the Irish embassy in Moscow on Tuesday to discuss the effects of the crisis on Irish business.

“From a trade point of view, the rouble-euro exchange rate — the so-called ‘Presidential Ban’ — targeted at the food sector as response to EU sanctions against Russia, in addition to a volatile and unpredictable political and legislative environment are key current risk factors in dealing with the Russian market,” MacCarthy said.

MacCarthy said that Irish companies in the food sector have been “hit hard” by the retaliatory sanctions against the European Union.

The latest available figures from the Central Statistics Office show Ireland’s total exports to Russia increased by 28 per cent from January to July, in comparison with July 2013 — with July alone showing a 121 per cent increase.

Enterprise Ireland client exports to Russia — which account for 45 per cent of those CSO figures — have increased by 87 per cent between 2008 and 2013, underlining the commitment that has been made to the Russian market despite the obvious current drawbacks.

Despite the volatile political landscape, MacCarthy said that Irish non-food companies had shown “agility and resilience” in engaging with Russia, which is the third-biggest non-EU exports market for Irish goods after the United States and China.

Constantin Gurdgiev, economist and chairman of IRBA said that opportunities still exist for Irish companies in Russia, with the market remaining “wide open” in sectors not impacted by the sanctions — particularly in genetics, ingredients, food technology and agricultural consultancy.

“There is renewed scope for investment in Russia,” Gurdgiev said specifically “in areas relating to technological innovation and modernisation” in these sectors.

To facilitate that, Gurdgiev added that it would be beneficial for Russian authorities to accelerate policy efforts directed at attracting foreign investors, specifically in areas linked to investor protection and regulatory and tax facilitation.

Gurdgiev said that Irish companies can expect more uncertainty for the foreseeable future, including the risk of significant further devaluation of the rouble, but taking a longer term view, he said the risk factors are likely to be replaced by “a more positive growth momentum and improved returns on foreign investment”.