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Western firms lost $103 billion from Russia exits – NYT | Western firms lost $103 billion from Russia exits – NYT |
(about 11 hours later) | |
Moscow has ensured that local buyers get massive discounts when foreign companies sell their assets | |
Efforts by Ukraine and its Western backers to convince, shame, and sanction companies into leaving the Russian market have backfired, placing lucrative enterprises in Russian hands at discount prices and pumping more than a billion dollars’ worth of exit taxes into Moscow’s coffers, the New York Times has reported. | |
Within days of Russian troops entering Ukraine last February, a host of Western corporations began pulling out of the Russian market. Ukrainian activists and officials hounded those who refused to leave, while US and EU sanctions prohibited the export of goods from, and import of raw materials to, Russia. | |
Companies that sold up their Russian operations lost a combined $103 billion, the New York Times reported on Sunday, citing financial records. These firms have also handed over at least $1.25 billion in exit taxes to the Russian state, the newspaper added. | |
As of last March, Western companies looking to sell their assets in Russia must have the sales approved by a Russian government commission, which often works to ensure that local buyers snap up these assets at bargain basement prices. | |
Citing the minutes from a commission meeting, the NYT claimed that the commission had rejected the sale of factories owned by Honeywell, an American electronics firm, until the company agreed to sell at a 50% discount, in line with Russian law. | |
“In all, [Russian President Vladimir] Putin has overseen one of the biggest transfers of wealth within Russia since the fall of the Soviet Union. Huge swaths of industries – elevators, tires, industrial coatings and more – are now in the hands of increasingly dominant Russian players,” the NYT wrote. | |
“Those who are leaving are losing their position,” Kremlin spokesman Dmitri Peskov told the newspaper. “And of course, their property is being bought at a serious discount and taken over by our companies, which are doing it with pleasure.” | “Those who are leaving are losing their position,” Kremlin spokesman Dmitri Peskov told the newspaper. “And of course, their property is being bought at a serious discount and taken over by our companies, which are doing it with pleasure.” |
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