Putin stole their businesses, but now they want them back

Now, however, the possibilities of a return to Russia – if not the extraction of adequate payment for stolen activities – have increased with Donald Trump to the White House and new messages by US officials on the reopening of economic ties with Russia.

Kirill Dmitriev, head of the Russian Direct Investment Fund, said last month that he expected that “a number of American companies will return to the Russian market already in the second quarter of the year”.

Some western companies have already laid the foundations for returning.

The French car manufacturer Renault has sold all its actions in Renault Russia and its 67.69 percent interest for Avtovaz in Russia in May 2022, but this agreement includes an option for Renault to regain its interest for Avtovaz which can be exercised for six years.

Luca De Meo, head of Renault, refused to exclude a return to Russia last month. However, since then officials have said that the car manufacturer should pay $ 1.3 billion to do it.

The managers should also be wary: analysts warn that Putin is using western companies as a pawn in his games with Europe and the United States. Western activities and lost cash have become a bargaining chip in negotiations on a potential peace agreement in Ukraine and a way to divide Europe.

“Since the penalties have proliferated, the Kremlin has always come according to which the Russian activities of multinational companies are useful guarantees for frozen activities abroad,” says Ian Massey, at the S-RM consultants.

Europe and the United States have Fremely $ 300 billion in the activities abroad of RussiaSomething that annoyed the Kremlin. The Raiffeisen Bank International (RBI) of Austria is fighting a fine of 2.4 billion dollars) set by a Russian court in January, which said that officials were compensation for frozen activities in Austria.

“We only had 10 minutes to present our case in court,” says RBI spokesman Christof Danz. The defendant was flanked by armed people who wore Balaclava. RBI is appealing to the sentence and has its next hearing in court on April 24th.

“The presence of western companies in Russia and the type of lever it gives [Putin] In some European countries it was one of the most useful tools in the Cremlin toolbox for years, “says Patrick Sewell, by Control Risks, a consultation.

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With Ariston’s decision, Putin could also try to divide Europe by reporting that the countries that take a softer line in Moscow could recover their resources, he says.

“I think it is plausible enough that Putin is happy to allow some western companies to resume their activities in a way that guides a wedge between different EU members.

“Sometimes Italy has been a kind of soft target for Russia. Generally they were among the most pairs of EU’s Russian friendlies, the Italian entrepreneurial community has always been very active in Moscow.”

Putin’s response to the tide wave of western sanctions that hit Russia after the start of the war was a vicious attack on foreign companies operating in the state. Of the $ 167 billion for lost since 2022, $ 57 billion were lost by 30 companies that seized their activity forcefully, according to the KSE Institute.

These included the French yogurt manufacturer Danone and the Danish brewer Carlsberg, both who sold their Russian activities and cut the losses.

Putin has also imposed blocks to companies trying to escape. Until last autumn, companies that sell activities in Russia had to undergo a 50 % shot on the sale price and pay a output tax on the proceeds of 15 %. In October, Russia increased to 60 % and the 35 % output commission.

Transactions are also subject to a prolonged approval process involving the financial ministry. 12 months may be needed and often it is not successful. In other words, many companies are actually kept on redemption.

Western companies are fighting. Ariston’s case was supported by the great pressure of the Italian Foreign Ministry. More companies are trying to attack through the legal system.

The German oil and gas producer Wintershall Dea started two arbitration proceedings against the Russian Federation after Putin signed the decrees that have started the company from all its five Russian joint ventures, also in the North Stream Pipeline.

The Finnish Energy Company Fortum started an arbitration procedure against Russia in February 2024 for compensation for illegal kidnappings after having had its activities seized by the presidential decree in 2023.

“Since then Fortum has lost all the supervision and control of resources and we are not aware of those who manage these activities nor do we have other information regarding the activities”, says ESA Hyvärinen, in Fortum.

These tactics can have a legally success. In June 2024, the German energy company Uniper won an arbitration sentence of $ 14 billion against the state -owned energy giant of Russia Gazprom. But there is a big difference between winning a court sentence and applying it.

“It seems good, it sounds good, but in practice awards of that nature in the current environment will probably be more symbolic in nature,” says Massey. “Application and recovery are very demanding exercises in hostile circumstances.”

If western companies cannot be paid for companies they have lost, would return to Russia would be a practicable option?

‘The presence of western companies in Russia and the type of lever it gives [Putin] In some European countries it was one of the most useful tools in the Cremlin toolbox for years. “

Patrick Sewell of Consultancy Control Risks

There are still $ 194 billion in foreign goods in Russia and Trump has suggested that it will give businesses the green light to resume operations there.

Marco Rubio, the United States Secretary of State, said in February that there could be “incredible opportunities” for American affairs in Russia.

“Until the election of Donald Trump, the companies were lined up to obtain approvals [to exit Russia]”Says Alan Kartashkin, who previously managed the Moscow Law Firm Office of Debevoise & Plimpon and now supervises its activity of Eastern Europe.

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“It has changed so much. Now, you have a President of the United States who says that we should develop economic ties with Russia and investors realize. No leaders in the western world has said that since then [Putin’s invasion of Ukraine in] February 2022. “

Hedge fund are exploring how they can make investments in the Russian stock market, he adds. “They want to bet on a potential peace agreement.”

Sewell states that other companies are observing the feasibility of the sale of non -sanctioned goods, such as food, again in Russia.

Only three years after losing billions in Russia, western companies are thinking of going back.

Telegraph, London

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