Response to sanctions: Russian public prosecutor’s office targets exit companies

International companies suspending their business in Russia over the attack on Ukraine have come under the spotlight of the Russian Prosecutor General’s Office.

Among other things, compliance with obligations towards Russian employees and their rights should be checked, the authority said. Any cessation of operations should also be checked for signs of intentional or sham bankruptcy.

Because of the Russian war of aggression in Ukraine, numerous international companies – suppliers of fashion and consumer goods, car manufacturers, banks, tech companies – have stopped doing business in Russia. Many stated explicitly that Russian employees should continue to be paid.

Kremlin threatens expropriation

The Russian government is already openly threatening to expropriate international companies that suspend operations in the country. The Russian government is therefore working on steps to initiate bankruptcy of companies in Russia and then nationalization of ownership, said Deputy Head of the Russian Security Council Dmitry Medvedev. A new production had to be set up “on the basis of the assets left behind by the panicked investors”.

President Vladimir Putin supported the proposal and called on his government to “act decisively” to prevent damage to the companies’ Russian business partners. There are already “enough legal market instruments” for this.

White House spokeswoman Jen Psaki warned the Kremlin against expropriation.

“Any unlawful decision by Russia to confiscate the assets of these companies will bring even more economic pain to Russia,” she wrote on Twitter. “It will send a clear message to the global business community that Russia is not a safe place to invest and do business.”