[PJ] A bill is working its way through the Russian Duma that would allow Moscow to seize Western companies that threaten to leave Russia.
Most Western companies have already left, but the few that remain now face severe pressure to leave or give in.
The law would give the government broad powers to intervene "where there is a threat to local jobs or industry," according to Reuters. It makes it "more difficult for western companies to disentangle themselves quickly unless they are prepared to take a big financial hit."
The law to seize the property of foreign investors follows an exodus of western companies, such as Starbucks (SBUX.O), McDonald’s (MCD.N) and brewer AB InBev (ABI.BR), and increases pressure on those still there.
It comes as the Russian economy, increasingly cut-off due to western sanctions, plunges into recession amid double-digit inflation.
Italian lender UniCredit (CRDI.MI), Austrian bank Raiffeisen (RBIV.VI), the world’s biggest furniture brand, IKEA, fast food chain Burger King, and hundreds of smaller firms still have businesses in Russia. Any that try to leave face this tougher line.
The EU is proposing to toughen its own rules on the Russian sanctions, including stiffening the penalties for violating the sanctions regime. But some Russian politicians don’t get the connection between the sanctions and the war. Former president Dmitry Medvedev, who is now deputy chairman of Russia’s Security Council, has been particularly vocal about Western companies leaving, attacking "enemies who are now trying to limit our development and ruin our lives." |