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Western business exit from Russian Federation turned into Putin's enrichment scheme: NYT reveals amounts

Kseniya KapustynskaNews
Companies leaving Russia leave millions of dollars to the Kremlin
Companies leaving Russia leave millions of dollars to the Kremlin

Since the beginning of Russia's full-scale war against Ukraine, the Russian budget has received at least $1.25 billion from the withdrawal of Western companies from the country's market. This money helped the Kremlin finance its military aggression. Moscow has taken total control over foreign businesses' attempts to leave the country, and some Western companies have faced direct threats and asset confiscation.

This is reported by the New York Times (NYT)."Putin has turned an expected misfortune into a scheme to enrich himself... He is squeezing the most out of companies by dictating the terms of their departure," the article says.

Thus, according to the rules in force in the Russian Federation, transactions for the sale of Russian assets to Western companies must be approved by the authorities. And there are several requirements for obtaining such "permission":

  • the asset must be sold at a discount of at least 50% of the value determined in the course of the appraisal;
  • the company must pay a "voluntary" contribution to the Russian budget: not less than 5% of the market value of the assets if the discount on sale does not exceed 90%, and 10% of the market value if the discount was more than 90% (usually this contribution is paid by the buyer of the assets).

The publication emphasizes that even if the requirements are met, "no deal is safe". For example, in the spring of 2023, beer giant Heineken found a buyer for its Russian business and set a price. However, the Russian government unilaterally rejected the deal and transferred the company's Russian assets to a local aerosol packaging company whose owners are connected to the government.

It is emphasized that the analysis of documents, financial statements and interviews with business representatives show that: Moscow now controls almost every exit from Russia at the micro level. "Companies have to navigate a non-transparent system to get approval to sell. In some cases, Putin's friends have directly asked him to intervene," the NYT reports.

According to the journalists, Western firms are also facing the threat of forceful measures. For example, as the publication has learned, the Russian authorities have already investigated companies leaving its market, interrogated workers and arrested local executives.

"Last summer (2022 - Ed.), Putin seized the Russian division of the Danish brewing company Carlsberg, along with about half a billion dollars in cash, and transferred it to the temporary control of one of his friends. At least four other companies also lost control of their operations in this year (2023 - Ed.) due to actual confiscations by the state," the publication notes.

As reported by OBOZ.UA,  the funds of Western companies that have not left the Russian market are stuck in the aggressor country. We are talking about more than $18 billion in profits for 2022, which were essentially frozen by the Kremlin.

Only verified information is available on the OBOZ.UA Telegram channel and Viber. Do not fall for fakes!

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