Kathrine Frich
We have already seen this new strategy in action.
Doing business across international borders always carries financial risk.
But for major foreign companies operating on hostile soil, typical boardroom headaches are turning into a corporate nightmare.
Billions of dollars in overseas assets could vanish without warning.
Retaliation targets business
Russian authorities have set their sights on European corporations. They are actively stripping foreign owners of their right to control local branches.
This aggressive move follows a recent decision by the European Union to renew its sanctions against Moscow.
Kremlin officials justify the corporate seizures by accusing Europe of direct involvement in the war in Ukraine. A senior government source told Reuters it is time for asymmetrical actions against the West.
A chilling warning
When pressed about specific targets, the threat became highly personal for two major financial institutions.
Reporters asked the government insider if Italian bank UniCredit and Austrian lender Raiffeisen might fall under state control. According to United24Media the source delivered a blunt reply, telling Reuters, “Let them be afraid.”
Russian corporate figures claim these European firms deliberately limit local growth, which they argue damages the Russian economy.
Despite the escalating tension, foreign businesses feel trapped. A senior executive told Reuters they expect this hostile environment to remain exactly as it is for the foreseeable future.
Taking over massive brands
We have already seen this new strategy in action. On September 17, Russian authorities seized the local operations of Nestlé and Auchan.
Officials linked that specific takeover directly to European military aid flowing into Ukraine.
The mechanics of the seizure look highly unusual. Bloomberg reported that Vladimir Putin signed a decree handing the corporate stakes over to a mystery entity.
According to registry data cited by Bloomberg, the new Moscow-registered firm boasts just one single employee and roughly $177 in starting capital.
Moscow rejects dialogue
Nestlé announced it was weighing its options to protect its legal rights. Meanwhile, Auchan Retail Russia simply asked authorities to clarify the sudden takeover order.
Do not expect a sudden change of heart. The Kremlin insists its asset seizures are a necessary response to Western military operations.
Spokesman Dmitry Peskov told reporters his government sees zero reason to back down. He added that Moscow hears no voices calling for dialogue or efforts to fix the situation.
