Why dream of the nationalization of foreign assets of companies that left the Russian Federation | Russia and Russians: a view from Europe | DV
Apple, McDonald’s, Mercedes-Benz, IKEA, Volkswagen… The list of foreign companies that have declared full or partial curtailment of business in Russia or its suspension due to Russian invasions of Ukraine continues to grow. At the time of this publication, there are already about 400 such firms, experts at Yale University in the USA have calculated. Closed restaurants, boutiques, closed types of imported goods.
Forced bankruptcy for companies that left the Russian Federation
In response, representatives of the authorities started talking about the nationalization of the property of foreign companies in the Russian Federation. As more correctly initiated in the Russian Ministry of Finance, we are talking about an accelerated bankruptcy mechanism for companies that have left the Russian Federation with more than 25% of foreign capital in the capital. Such a radical step, even in Russia, is not welcomed by everyone. As Russian billionaire Vladimir Potanin stated, this “will take us back 100 years, to 1917” and the environment to “a global lack of trust in Russia’s parties from the side of influence.”
One McDonald’s employs more than 62 thousand people in Russia
Nevertheless, the Prosecutor General’s Office of the Russian Federation has already revealed that foreign enterprises have been found, especially in terms of identifying employment contracts and protecting the rights of workers. Their number is really significant: for example, only one McDonald’s employs more than 62,000 people in Russia. However, the argumentation of the Prosecutor General’s Office of the rise – given that most of the foreign issues are known that at first the payment of wages under the contract continues.
Arrest of Russian possession abroad?
The answer was not born to wait long. “Any unexpected decision by Russia to seize foreign assets caused even more painful economic consequences for the Russian Federation,” said White House Press Secretary Jennifer Psaki. In the event that such a situation arises within the framework of a judicial procedure as a defendant, the agreement is made by Marc Bungenberg, an expert in economic law at the University of Saarland.
Jennifer Psaki
“In Russia, cases of the emergence and suspension of justified expropriation will certainly be revealed,” Bungenberg believes. “But at the moment I don’t see any legal grounds for this statement.
Well, when the court takes the side of foreign companies and is detained from paying compensation to Russia – what then? Will Moscow fly? Getting money will be expected, Bungenberg remarks. According to him, enforcement proceedings will be launched, within the framework of which the identification and seizure of possession of the Russian Federation abroad will begin.
What to do with confiscated assets?
Even more unclear to experts is the question of what Russia will deal with confiscated assets – from shops to production facilities and farms. Western retail chains – Zara, H&M or IKEA – were really active in Russia, but most of the products were supplied to the Russian market from abroad. “It was all imports,” recalls Michael Rochlitz, a Russia expert and professor of economics at the University of Bremen. “The stores will just be empty. It doesn’t make any sense.”
A delegation from Germany celebrates the November 2013 production of 700,000 vehicles at the VW plant in Kaluga
What might work in the short term is food production, says Rochlitz, pointing to the shape of a company that produces dairy products in Russia as an example. It is easy to nationalize them, he says.
It is much more difficult to replace and replace the work of Volkswagen, Toyota or Renault, voluminous years to adjust production chains in Russia. After all, most of the components for cars came from abroad. In the event of long-term illnesses, Russia will most likely reorient itself to the supply of components from China. “They’re probably making cars out of Chinese parts for the domestic market,” says Rochlitz. “But not for export, because these cars are likely to be uncompetitive in the global market.”
According to the expert, this time they fundamentally undermined the effective Russian economy – and this is a blow much greater than the structure and proximity of Russia now seem. “If you expropriate the assets of foreign companies today, then in the future, if the sanction is rejected and an attempt is made to re-build the Russian deal, foreign companies will think before returning to the Russian market,” concludes economics professor Rochlitz.
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