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Illustration: Vladimir Putin with dollar and Euro signs in his eyes
Vladimir Putin did something which, at first glance, seems entirely out of character.
Last year, the Russian president signed a decree authorizing the entry of the Russian subsidiary of the manufacturer of Italian heating systems Ariston. The order transferred the control of the company to Gazprom Household Systems, an arm of the Russian energy giant belonging to the State.
But Wednesday, Putin signed another presidential decree reversing this decision and transferring the ownership of the company to the Italians.
Paolo Merloni, executive president of Ariston Group, said: “We intend to resume activities with our Russian local management, fully adhering to existing sanctions and continue our inheritance in the country.”
At its nominal value, it seems that a door opens so that Western companies return assets entered by the Kremlin After the Russian troops flocked to the Ukrainian border in 2022.
Western companies have undergone $ 167 billion (129 billion pounds sterling) losses in Russia since Putin launched her large -scale invasion, according to the analysis of the kyiv School of Economics (KSE).
The sanctions against trade have triggered a wave of business outings, while multinationals also had their assets and the staff arrested. Many others have been forced to sell at 80pc reduction.
Putin tactics have sparked a wave of business fighting and legal complaints while businesses are trying to recover their money. Until recently, it seemed little hope that companies manage to extract anything from Russia.
Now, however, the chances of return to Russia – if not the extraction of an appropriate payment for stolen assets – have increased with Donald Trump in the White House and new messages from American officials on the reopening of economic ties with Russia.
Kirill Dmitriev, the chief of Russian Direct Investment Fund, said last month that he expected that “a certain number of American companies will return to the Russian market in the second quarter of the year”.
Some Western companies have already made the foundations to return.
French automaker Renault has sold all its actions from Renault Russia and its 67.69pc of interest in Russian Avtovaz in May 2022, but this agreement includes an option for Renault to buy its interest in Avtovaz which is exercised for six years.
Renault chief Luca de Meo refused last month to exclude a return to Russia – Andrey Rudakov / Bloomberg
Managers should also be wary: analysts warn that Putin uses Western companies as a pawn in its games with Europe and the United States. Lost Western assets and species have become a negotiation issue in negotiations on a potential peace agreement on Ukraine – and a means of dividing Europe.
“While the sanctions have proliferated, the Kremlin is increasingly reported that the Russian assets of multinational companies are useful guarantees for frozen assets abroad,” explains Ian Massey, at S-RM Consultants.
Europe and the United States have frozen some $ 300 billion in assets abroad in Russia, which has upset the Kremlin. Austria Raiffeisen Bank International (RBI) fights against a fine of 2 billion euros (1.7 billion pounds sterling) inflicted by a Russian court in January, which, according to officials, was compensation for frozen assets in Austria.
“We only had 10 minutes to advice,” said RBI spokesperson Christof Danz. The accused was flanked by armed people carrying hoods. RBI appeals to the decision and has its next court hearing on April 24.
“The presence of Western companies in Russia and the type of lever that gives [Putin] Above some European countries, has been one of the most useful tools in the Kremlin toolbox for years, “said Patrick Sewell, who is running advice control and supervises Russia.
With Ariston’s decision, Putin can also try to divide Europe by reporting that countries taking a softer line in Moscow can recover their assets, he said.
“I think it is quite plausible that Putin is happy to allow certain Western companies to resume their assets in a way that leads to a gap between different members of the EU.
“Italy has sometimes been a kind of sweet target for Russia. They were generally among the most Russian friendly clerks in the EU, the Italian business community has always been very active in Moscow. ”
Putin’s response to the tide of Western sanctions that struck Russia after the start of the war was a vicious attack on foreign companies operating in the state. Out of the $ 167 billion lost since 2022, $ 57 billion was lost by 30 companies that have had their assets seized by force, according to the KSE Institute.
These include the manufacturer of French yogurt Danone and Danish brewer Carlsberg, who both sold since their Russian assets and reduces their losses.
Putin also imposed blocks on companies trying to escape. Until last fall, companies selling assets in Russia had to take a 50pc on the sale price and pay an exit tax on the 15PC product. In October, Russia increased the delivery to 60pc and the exit costs to 35pc.
Transactions are also subject to a prolonged approval process involving the Ministry of Finance. It can take 12 months and is often unsuccessful. In other words, many companies are actually held in ransom.
Western companies are retalling. The case of Ariston was supported by a major lobbying of the Italian Ministry of Foreign Affairs. More and more companies are trying to attack the legal system.
The German producer of oil and gas Wintershall DEA has started two arbitration procedures against the Russian Federation after Putin signed decrees by starting the company of its five Russian co -entreprises, including in the North Stream pipeline.
The Finnish energy company Fortum also initiated an arbitration procedure against Russia in February 2024 for compensation for illegal crisis after having its assets seized by presidential decree in 2023.
“Fortum has since lost any monitoring and control over assets, and we are not aware of who manages these assets and we have no other information concerning the assets,” explains Esa Hyvärinen, at Fortum.
US Secretary of State Marco Rubio said there may be “ incredible opportunities ” for American affairs in Russia – Carlos Barria / Reuters
These tactics can succeed legally. In June 2024, the German energy company Uniper won an arbitration decision of $ 14 billion against the energy giant belonging to Russia Gazprom. But there is a big difference between winning a court decision and applying it.
“It looks good, it seems good, but in practice, the prices of this nature in the current environment are likely to be more symbolic,” explains Massey. “Application and recovery are very difficult exercises in hostile circumstances.”
If Western companies cannot be paid for the companies they have lost, would the return to Russia a viable option?
There are still $ 194 billion in foreign active ingredients in Russia, and Trump suggested that he will give companies the green light to resume operations there.
Marco Rubio, the US Secretary of State, said in February that there could be “incredible opportunities” for American affairs in Russia.
“Until the election of Donald Trump, companies were lining up to obtain approvals [to exit Russia]”Explains Alan Kartashkin, who previously directed the law firm of Moscow Debevoise & Plpton and now supervises its activities in Eastern Europe.
“He has changed so much. [Putin’s invasion of Ukraine in] February 2022. “
The hedge funds explore how they can invest in the Russian stock market, he adds. “They want to bet on a potential peace agreement.”
Sewell says other companies are considering the feasibility of selling non -sanctioned products, such as food, in Russia again.
Only three years after losing billions in Russia, Western companies plan to go back.
