Russia eyes seizing the assets of 'naughty' Western firms operating in the country
- Russia is laying claim over the assets of "naughty" Western firms in the country, the Financial Times said.
- Last week, the Kremlin secretly ordered legislation that allows Western assets to be seized a steep discounts.
Russia is laying claim over the assets of any "naughty" Western firms operating in the country, Kremlin officials told the Financial Times, likely making it harder for them to leave the country.
President Vladimir Putin secretly signed a new decree last week that gives Russia the power to seize Western assets at steep discounts and sell them later for a profit, people familiar with the matter told the FT.
The Kremlin intends to use the threat of nationalization to punish Western firms that don't abide by Russia's rules, the report said.
Though Western firms are "more than welcome" to pursue business in Russia, some foreign companies operating in the country have failed to pay their dues and have left Russia with huge losses, Kremlin spokesperson Dmitry Peskov told the FT.
"If a company doesn't fulfill its obligations, then, of course, it goes in the category of naughty companies. We say goodbye to those companies. And what we do with their assets after that is our business," he added.
Meanwhile, Putin's decree also requires all private buyers of Western firms to be fully Russian or in the process of removing non-Russian shareholders.
The new rules mark an escalation in Moscow's crackdown. In December, Russia said Western companies must offer Russian buyers a discount of 50% or more and provide a "voluntary" contribution to the Kremlin's budget of 5%-10% of any deal's price tag.
That comes as Russia battles a slowing economy, and is scrambling to scrape together more money to fund its ongoing invasion of Ukraine.
Foreign firms leaving the nation could worsen the outflow of capital leaving Russia, which could do more damage to its economy and potentially hurt the ruble as well as investors, sources told the FT.