Putin: External management necessary if foreign firms exit Russia | Russia-Ukraine war News

Marion Steward

The Russian government says it has drafted legislation that introduces an “external” administration if international owners decide to close their companies in the country over its decision to invade neighbouring Ukraine.

Growing numbers of Western companies have suspended or ended operations in Russia after the United States and European countries imposed crippling economic sanctions that have already dealt a severe blow to the Russian economy, causing the rouble to plunge and prices to rise significantly.

“With regard to those who are going to close their production [in Russia], we need to act decisively here, in no cases allow any damage to local suppliers,” President Vladimir Putin told his cabinet via video link on Thursday.

“It’s necessary … to introduce external management and then transfer these enterprises to those who want to work,” he said, after Prime Minister Mikhail Mishustin said the government had prepared the draft law.

Putin also told his ministers Russia should ensure that the rights of foreign investors who chose to remain in the country are “reliably protected”.

(Al Jazeera)

Foreign investment built up over the 30 years since the collapse of the Soviet Union and the jobs it brought are heading for the door.

From Boeing and Airbus to Apple, Disney, TikTok, McDonald’s and Starbucks, top brands and industry leaders are suspending their operations in Russia or making plans to wind down continuing business operations.

Big corporations like Volkswagen, Ikea and Apple have idled plants or halted sales, while energy giants BP, Exxon and Shell have said they will stop buying Russian oil and gas or exit partnerships there.

“Western countries are trying to create a shortage of everyday imported goods in our country, forcing the closure of successfully operating foreign-owned businesses,” Russian Finance Minister Anton Siluanov said.

The Russian newspaper Izvestia reported on Thursday the government and the general prosecutor’s office were considering a proposal to nationalise foreign companies that have announced they are pulling out of Russia because of the war in Ukraine. The newspaper said it had a list of nearly 60 companies, including IKEA, McDonald’s, Apple, Microsoft, IBM and Porsche, among others.

The article said some were urging caution. One expert quoted warned against hasty actions, saying some of the businesses were acting under pressure from their governments and that it would be wrong to conclude that they have closed their doors on the Russian market forever.

For many companies, doing business in Russia has also become simply too difficult due to practical concerns about payments, shipping and insurance, according to Rachel Ziemba, an adjunct senior fellow at the Center for a New American Security.

Russian companies face restrictions on borrowing and equipment imports that are likely to limit their ability to conduct business for the long term. SWIFT, the international payments system, has cut off several major Russian banks, while credit card companies Visa, Mastercard, and American Express are also suspending operations.

Addressing his cabinet, Putin acknowledged that sanctions imposed since the February 24 invasion were being felt but stressed that Russia has endured such measures before, was not closing itself from anyone and continues fulfilling its obligations in the energy supply sphere.

“They announced that they are stopping the import of Russian oil to the American market. Prices there are high, inflation is unprecedentedly high, it probably reached historical levels. They try to blame the results of their own mistakes on us,” Putin said.

Hitting back against the West, the Russian government said earlier that it had banned exports of telecom, medical, auto, agricultural, electrical and tech equipment, among other items, until the end of 2022.

In total, more than 200 items were included on the export suspension list, which also covered railway cars, containers, turbines and other goods.

https://www.aljazeera.com/economy/2022/3/11/putin-external-management-necessary-if-foreign-firms-exit-russia

Next Post

2022 trends for banking and finance

With increased demand for integration of environmental, social and governance considerations into financial strategies, the expected upturn in spending on sectors that lay practically dormant due to the pandemic (i.e. travel), a positive outlook for project finance and the likelihood of rising interest rates, we look ahead to the rest […]
2022 trends for banking and finance