The Kremlin wants to nationalize “bad” Western companies at a very low price through a new law. That writes the Financial Times based on insiders. The Russian government can then resell these companies at a profit. “The threat in this new law is great,” says Steven Brakman, a professor of international economics at the University of Groningen.
The pressing question is of course: when are you “bad” as a Western company? According to Brakman, it is a euphemistic term for companies that do not respect Russia’s wishes, threaten to stop paying taxes and leave their premises. “The country wants to make money from these companies, which are part of the Russian economy. It sounds mischievous as if your teacher is punishing you, but there really is a threat here, namely nationalisation.’
‘Russians see this as rebate in kind’
If companies threaten to leave, Russia can force them to sell to the country at a steep discount. The indicated percentage is 50%. If you are still “bad” after that, it will be nationalized. And that means you have lost your business. “It is a serious threat that is reflected in this law. If this law is passed, the Kremlin could in principle punish any Western company operating in Russia,” Brakman says.
Sanctioning battle
The new legislation comes in response to sanctions imposed on Russia by Europe and the United States. “Even Europe and the United States have frozen Russian assets. Russians see this as a return to nature,’ says Brakman.
Russia will resell these companies to other Russians in hopes that business will continue. For some companies that use a high-quality technique, for example, this process will be much more difficult. According to Brakman, Russia will therefore carefully examine which companies are suitable for this action.
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Source: BNR
Sharon Rock is an author and journalist who writes for 24 News Globe. She has a passion for learning about different cultures and understanding the complexities of the world. With a talent for explaining complex global issues in an accessible and engaging way, Sharon has become a respected voice in the field of world news journalism.
