Russia possibly to ban return of Western brands
(MENAFN)
The Russian State Duma is preparing to pass legislation that would regulate the ability of foreign companies to repurchase assets they sold when leaving the country, Izvestia reported on Tuesday. The bill has already received approval from the Finance Ministry and will go through its second and third readings together.
The Russian State Duma is preparing to pass legislation that would regulate the ability of foreign companies to repurchase assets they sold when leaving the country, Izvestia reported on Tuesday. The bill has already received approval from the Finance Ministry and will go through its second and third readings together.
Following the 2022 escalation of the Ukraine conflict and subsequent Western sanctions, many companies from the US, Europe, and Asia exited the Russian market due to supply issues, the threat of secondary sanctions, or public pressure. The proposed legislation would allow Russian authorities or current owners to reject asset buyback requests under several conditions.
According to the bill reviewed by Izvestia, reasons for denial include the seller originating from a country that imposed sanctions on Russia, the buyback price being below market value, or more than two years passing since the original sale—provided the new Russian owner has met obligations to employees and creditors.
Buybacks may also be blocked if the business operates in critical sectors such as defense or finance. In such cases, approval from the Russian president would be required.
The legislation, expected to be voted on in June, could affect at least 18 companies, including global names like Renault and McDonald’s. The bill also proposes compensation for foreign companies denied buybacks, but the amount would be set by the government and could be reduced if the exiting firm failed to meet obligations at the time of departure.
President Vladimir Putin had previously directed the government to create rules for foreign firms wishing to return to the Russian market, stressing the importance of protecting domestic businesses. Since many international companies left, local and Chinese brands have largely replaced them, especially in industries like fashion and automotive.
Putin also stated that foreign tech companies still operating in Russia while undermining its interests should be forced out. He singled out firms like Zoom and Microsoft, adding, “They try to squeeze us, so we must respond in kind.” He emphasized that Russia did not expel companies but had instead offered them favorable conditions.
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