Russian prosecutors are threatening to arrest executives and seize the assets of Western companies in Russia.
Companies with corporate leaders who criticize the Russian government or threaten to withdraw their business from the country in accordance with Western sanctions run the risk of coming into conflict with Russian prosecutors.
American corporations including Coca-Cola, McDonald’s, Procter & Gamble, IBM, and Yum Brands received stern warnings from prosecutors in Russia. They received phone calls, letters, and physical confrontations where prosecutors threatened to seize company assets, including trademarks, the Wall Street Journal reported.
Russian President Vladimir Putin also expressed support last week for a new law that would nationalize the assets of foreign companies that leave Russia in response to Western sanctions levied upon the country after it invaded Ukraine.
The Russian government’s approach to preventing businesses from leaving has led to some companies limiting communications with their Russian counterparts out of concern that their communications were being monitored.
Other companies have begun working to move their executives out of Russia.
The Russian embassy in Washington, D.C., took to Twitter to refute the claim that its government was either seizing assets or arresting executives.
The embassy said, “The decision whether to continue entrepreneurial activity in our country is entirely up to the Americans. As well as the right to ignore Russophobic hysteria that encourages foreign businesses to suffer huge losses in order to hit Russia.”
The alleged threats to arrest company executives and seize assets reportedly came in response to Western sanctions on Russia in response to its invasion of Ukraine. These sanctions have debilitated the Russian economy.
In late February, leaders from the European Commission, France, Germany, Italy, Canada, the United Kingdom, and the United States issued a joint statement calling for the removal of Russian banks from the SWIFT telecommunications network.
In doing so, Western leaders committed to “imposing restrictive measures that will prevent the Russian Central Bank from deploying its international reserves in ways that undermine the impact of our sanctions.”
This and the removal of Russian banks from the SWIFT network make it incredibly difficult for Russia to participate in international trade and keep its economy afloat.
The Russian invasion of Ukraine, and the subsequent Western sanctions, compelled many international corporations to reconsider their business relationships and practices within Russia.
Financial sector giants Visa and Mastercard severed their ties with the Russian market, subsequently making all Russian-issued Visa and Mastercard bank and credit cards useless; the British Petroleum Company liquidated its holdings in the Russian energy sector and ended its long-standing business relationships; McDonald’s and PepsiCo proceeded to end their operations in Russia; and Disney opted to halt film releases in the country.