Ukraine's National Agency on Corruption Prevention (NACP) has taken a firm stance against the U.S. fast-food giant, Subway, adding it to its list of international sponsors of war.
This action is a direct response to Subway's ongoing business operations in Russia amidst the ongoing conflict between Russia and Ukraine.
According to the NACP, over 500 Subway restaurants remain operational in Russia, contributing substantial tax revenues to the Russian budget.
The agency criticized Subway for its active promotional efforts on sanctioned Russian social media platforms and for utilizing Yandex services for food delivery. Notably, Subway has not publicly announced any plans to exit the Russian market since the onset of Russia's full-scale invasion of Ukraine.
The NACP's statement sheds light on Subway's business model in Russia, where restaurants are independently owned and operated by local franchises. This model has allowed Subway to maintain its presence in the country. However, Ukraine contests this explanation, labeling it as misleading.
Further complicating the situation, the NACP alleges that Subway engaged a Russian law firm to navigate legal pathways for collecting royalties from its Russian franchises. This move was necessitated by restrictions imposed by Russian banks on Western companies receiving royalties. According to the NACP, the law firm successfully identified mechanisms for Subway to legally continue receiving royalties from its operations in Russia.
The agency also pointed out the absence of any public condemnation of Russia's actions in Ukraine from Subway's management. This lack of response, coupled with Subway's continued business activities in Russia, has led the NACP to categorize Subway as a supporter of the war effort.
This development highlights the ongoing challenges multinational corporations face in navigating complex geopolitical conflicts. Companies like Subway are increasingly under scrutiny for their operations in contentious regions, facing pressure from governments and public opinion to align their business practices with broader political and ethical considerations.
