More than 2,000 “unfriendly” companies wishing to leave Russia are being blackmailed by the Kremlin regime into making a “donation” of at least 10% of the proceeds from the sale of assets held in the country to the state budget.
More than a year after the outbreak of war against Ukraine, and with its budget severely strained by economic sanctions imposed by the West, the Kremlin regime is turning against Western companies that have so far been reluctant to bear the costs of exiting Russia, requiring them to “donate” to the state budget part of the proceeds from the sale of their business. The maximum tariff is not a fixed one, to be decided “voluntarily” by the companies concerned:
According to the official statement posted Monday by the finance ministry, investors who sell their businesses and are from “unfriendly countries” – those that imposed sanctions against Russia for invading Ukraine – must donate at least 10% of the proceeds from the sale to the state budget.
Easily mistaken for a protection tax imposed on the model of mafia organizations, the claimed “donation” from the sale of assets to foreign companies is in addition to a mandatory 50% rebate applicable to amounts assessed on assets put up for sale by foreign companies. Thus, companies wishing to leave Russia are fleeced twice. First by undervaluing the assets held, and then by partially “donating” the proceeds of the sale.
While more than 1,000 companies quickly announced that they were voluntarily scaling down their operations in Russia just two months after the start of the war in Ukraine, in February 2022, only 520 companies managed to suspend their activities completely. About 550 foreign companies are still active in Russia, according to the study by Jeffrey Sonnenfeld, a professor at the Yale School of Management.
Lured by cheap labor and the promise of big profits from a fairly large class of affluent consumers, multinational companies are the hardest hit, with complete withdrawal meaning not only the loss of investments made so far in Russia, but also lawsuits with former business partners or Russian authorities.