Vladimir Putin is keen to make it as difficult as possible for Western companies to withdraw from Russia. Getty Images
According to the New York Times, Russian authorities are taking a close look at companies’ migration plans and monitoring them down to the last detail.
After the invasion of Ukraine, numerous foreign companies announced their withdrawal from Russia.
However, many of them are still working in Russia and are not making any progress with their plans to leave the country.
After Moscow’s invasion of Ukraine, Western companies eagerly announced their withdrawal from Russia – but many are still active there. It’s not like they won’t try. But the Kremlin reviews and controls almost every specific company withdrawal plan before approving it, they said „New York Times“ (NYT) on Sunday.
Russia makes it more difficult for companies to withdraw
The NYT article comes almost 22 months after Russia invaded Ukraine. He shows how the Russian authorities put obstacles in the way of Western companies and impose high requirements on them if they want to withdraw from the market. The domestic Russian economy is affected by widespread sanctions, including the twelfth round of European Union trade restrictionswhich came into force on Monday.
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At the start of the war, companies like McDonald’s and Starbucks were able to withdraw within a few months. But Russia has made the withdrawal much more difficult. Foreign companies wanting to leave Russia must now not only pay fees to the state and sell their property at significant discounts before they are allowed to leave the country, but their Migration plans must also be approved by a government commission.
Companies operating in strategic sectors such as energy and raw materials must also seek approval from President Vladimir Putin before selling their assets.
Russian authorities are so strict about vetting companies seeking to leave the country that Finnish tire maker Nokian Tires even had to seek approval to sell an apartment for $59,000, the NYT reports, citing internal logs .
Johanna Horsma, chief transformation officer of Nokian Tires, told Business Insider that the transaction is likely related to a residential complex built by the company’s Russian branch in the early 2010s. Employees were able to buy an apartment there, which they owned outright after seven years of employment.
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Moscow is not just relying on bureaucratic obstacles
But companies don’t just have to overcome bureaucratic hurdles. Moscow is screening companies seeking to leave the country, interrogating employees and even arresting local executives, the NYT reported.
A recent analysis by Business Insider found that most foreign companies have not yet completely exited the Russian market – although many big international names have already left.
Foreign companies still operating in Russia cited various reasons for not withdrawing. These include operational, moral and political challenges. Some are also concerned about the retention of their assets and technology in Russia.
However, the Kremlin does not seem to be worried about the withdrawal of Western companies. “Those who leave will lose their position,” Kremlin spokesman Dmitry Peskov told the NYT. “And of course their property will be bought up at a significant discount and taken over by our companies who are happy to do that.”
This article has been translated from English. You can find the original here.