Page 27 - RusRPTJul23

2.10 Putin decree allows for nationalisation of “naughty” western companies
Vladimir Putin has instructed the government to make it even harder for
“naughty” (nekhoroshi) Western companies to work in Russia and those that
do not want to play by the Kremlin’s rules should leave the country, the
Financial Times reported on June 15.
A presidential decree prepared last week seen by the Financial Times, lays the
ground for de facto nationalization of foreign-owned assets in Russia. It gives
the state the right to buy assets at a bargain price with the subsequent
purchase by a Russian company.
The goal of the decree will be another source of revenue to the cash-strapped
budget, as well as a tool to punish foreign countries for the imposition of
sanctions. The Russian owners of the confiscated assets will be obliged to list
20% of the company on the Russian stock market.
Russian businessmen interviewed by the Financial Times consider
nationalization inevitable: "The state needs money," says one of them.
Presumably, it will affect primarily the extractive industries and the production
of consumer goods.
“Chairman of the Central Bank Elvira Nabiullina spoke out in favour of limiting
the exit of foreign companies under the threat of nationalization,” th central
bank governor said during a panel session at St Petersburg International
Economic Forum (SPIEF) the same day.
The Central Bank is worried that the outflow of foreign capital will weaken the
ruble and limit the opportunities for Russian investors. But Finance Minister
Anton Siluanov supported the departure of foreigners, seeing this as “a way to
squeeze more money into the budget.”
Presidential spokesman Dmitry Peskov told the FT that among Western
companies there are those that have stopped paying salaries or simply left with
losses.
“If a company does not fulfil its obligations, naturally, it falls into the category of
“naughty”, Peskov told the newspaper. “With such we say goodbye. And what
will happen to their assets later is our business.”
While the nationalization in Russia has affected a few companies, the most
striking example is Fortum and Uniper. Companies leaving Russia are already
required to sell the asset at half price and pay a “voluntary contribution” of
5-10%, not counting the excess profit tax of previous years.
27 RUSSIA Country Report July 2023 www.intellinews.com