Page 51 - Russia OUTLOOK 2024

Russian media report that such surcharges to date have raised RUB80bn (about $1bn) for state coffers. Under Russia’s 2024 budget framework, however, this temporary revenue stream is expected to dry up next year.
Changes in Russian law this year now permit freezing or the seizure of the assets of foreign firms by Russian officials. Russian officials have already this year confiscated the Russian operations of Finnish energy company Fortum, Danish brewer Carlsberg and French food giant Danone. In addition, Russian officials can commandeer any firm operating in Russia to participate in the war effort.
In December, the EU said it would pay compensation to companies whose assets were nationalised by Russia. The leaders of the EU, having agreed on the twelfth package of sanctions, decided to use funds frozen in the EU to compensate European companies that lost assets in Russia. If the Russian division of a European company was forcibly transferred to the control of Russian authorities, it will be possible to use Russian assets seized in Europe to pay adequate compensation to the Western parent company.
• 2.7 Rise of the stoligarchs
Putin has overseen one of the biggest transfers of wealth within Russia since the fall of the Soviet Union. Huge swathes of industries are now in the hands of a new class of state-connected businessmen.
The existence of “stoligarchs” – state sponsored oligarchs – is nothing new. Putin attempted to co-opt the regular oligarchs in the noughties and ensure their investment plans dovetailed with those of the Kremlin, as described by bne IntelliNews in the ZAO Kremlin model. However, that failed as the oligarchs’ greed interfered with this effort. Putin abandoned his regular one-on-one meetings with the leading Russian businessmen and increasingly retreated to a small circle of businessmen who were personally close to him. These were awarded huge state contracts that the president could oversee personally. The most famous of these are Gennady Timchenko and the Rotenberg brothers, Arkady and Boris, friends of Putin’s from his St Petersburg youth.
The stoligarch system has now been expanded to a much broader circle of businessmen that are not personal friends of Putin but are seen as patriotic and maintain good connections with the government, in a system that could be described as a “hybrid nationalisation.”
The problem with the traditional oligarchs that came up under Boris Yeltsin was they were ultimately independent market players, motivated solely by profit but proficient at operating in the corrupt rough and tumble of 1990s Russia. The new stoligarchs are much more attuned to the Kremlin’s wishes and its
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