Kremlin: Western companies leaving Russia will come across many problems

Kremlin excludes free exit of Western companies from Russia

Western companies leaving Russia must agree the price for selling their business in Russian rubles, The Financial Times reports.

Western companies that decided to leave the Russian market will have to abide by certain conditions that the Russian government presented, Kremlin's official spokesman Dmitry Pekov told reporters.

"There is no free exit now, and the commission strictly regulates this [process],” Peskov said, Interfax reports.

At the same time, Russia remains open to foreign investment, he added.

"Maybe someone will say that this sounds somewhat contradictory today, but it does not. Other companies come to fill the niches that have been vacated here after other companies left the market. If companies from some countries leave, then companies from other countries show increased interest,” Dmitry Pekov said.

Russia creates comfortable conditions for such companies, but the situation is different for those Western companies that decide to leave.

"Taking into account the quasi-war that the collective West is waging against the Russian Federation, including the economic war, there are special conditions working for Western companies that have to leave Russia under pressure from their governments,” Dmitry Pekov said.

The Financial Times earlier reported that the Russian authorities prohibited Western companies from withdrawing proceeds in dollars and euros when selling their businesses in Russia. The move came as a measure of additional currency controls in an attempt to support the weakening ruble, the newspaper noted.

Western companies leaving Russia should agree on a business sale price in rubles. Those insisting on receiving foreign currency will face delays and even financial losses before they could transfer they amounts abroad, the article said.

After Russia launched the special military operation in Ukraine, US and EU imposed a multitude of sanctions against Russia. Many Western companies later announced plans to either suspend their activities on the Russian market or leave it completely.

All business sale transactions concluded by companies from Russia-unfriendly countries (the list includes the USA, EU countries and a number of other states) are subject to approval by the subcommittee of the Government Commission on Foreign Investment.

In October, President Vladimir Putin signed a decree on the mandatory sale of foreign currency revenues by 43 groups of companies. The Kremlin said that the specific list of the groups of companies would not be disclosed. Putin signed the decree against the backdrop of the weakening rate of the Russian ruble, when both the dollar and the euro exchange rates exceeded the psychological threshold of 100 rubles per one dollar/euro in late summer.

The purpose of the decree is to solve the problem of imbalance of cash flows, President Putin explained. There is reason to believe that the ruble exchange rate fluctuates because foreign exchange earnings do not return in sufficient quantities, the head of state said.

On October 31, the US dollar was traded at 92.71 rubles per one dollar.

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Author`s name Andrey Mihayloff
Editor Dmitry Sudakov