The outflow of corporations that have left Russia since the start of the invasion of Ukraine has cost foreign companies more than $107 billion in asset write-downs and lost revenue, a Reuters analysis based on their balance sheets and other financial documents shows.

The damage was up by a third compared to last August, when Reuters last analyzed the topic, underscoring the extent of the blow to foreign businesses and the loss of Western expertise the Russian economy has suffered.

“As Russia’s invasion continues amid dispersal of Western military aid [pentru Ucraina] and increasing Western sanctions [împotriva Moscovei]”Companies still looking to exit Russia are likely to face additional difficulties and be forced to accept even larger write-offs and losses,” analyst Ian Massey of consultancy S-RM told Reuters.

Massey adds that President Vladimir Putin, fresh from his presidential election results, now has a renewed mandate to continue isolating the Russian economy from the West, including through further asset seizures and political pressure.

Russia asks foreign companies to leave the country with empty pockets

Moscow is demanding at least a 50% discount on their Russian assets from foreign companies that want to leave the country, and is gradually tightening the terms, with multinationals in some cases selling their Russian businesses to local buyers for a token sum of one rouble.

This is possible because any such transaction must first be approved by the Ministry of Finance in Moscow, which refuses to give its consent if the foreign firms do not accept the proposed conditions.

This year, Shell, Polymetal International and Yandex announced the sale of Russian assets totaling nearly $10 billion at discounts of up to 90 percent. Danone announced last week that Russian authorities had agreed to sell its assets in the country, taking a $1.3 billion loss on the deal.

According to an analysis published by the Yale School of Management, about 1,000 companies have left Russia since the invasion of Ukraine began, although hundreds of other foreign companies, including French retailer Auchan and Italian clothing chain Benetton, are still doing business in Putin’s country or have temporarily suspended their operations. activity.

Russia threatens further retaliatory measures

Western countries and their partners have frozen the assets of the Central Bank of Russia in the form of gold and foreign exchange reserves worth about 300 billion dollars. Germany nationalized the Gazprom oil refinery, renaming it Sefe, and transferred the Russian giant Rosneft under German control.

Russia has vowed to strongly oppose any move by the EU to redistribute billions of euros in profits from frozen assets, warning that any attempt to use the money to help Ukraine with the funds would lead to decades of litigation.

Reuters notes that Western banks are also concerned about the legal complications such a move could create and possible retaliatory measures from Moscow.

“There are no Western assets that can be considered safe or secure in Russia as long as the Kremlin continues to wage war,” says analyst Massey.

Moscow has already taken “temporary” control over the assets of some Western companies, including Fortum, Carlsberg, OMV and Uniper.

Russian state media suggest that Moscow may seize all assets of Western companies

RIA Novosti, one of Russia’s state news agencies, estimated that the West could lose at least $288 billion in Russian assets and investments if Moscow “retaliates.” RIA claims to have made a calculation based on data according to which direct investments in the Russian economy by the EU, G7 countries, Australia and Switzerland amounted to $288 billion by the end of 2022.

According to the cited source, EU member states have assets worth $223.3 billion in Russian assets, of which $98.3 billion are in companies registered in Cyprus, $50.1 billion in some in the Netherlands, and $17.3 billion in German companies.

Reuters notes that it could not independently confirm the data provided by RIA.

But Moscow’s tough line also affects the Russian economy.

Attorney Jeremy Zucker, a specialist in international sanctions, says that a surprisingly large number of his law firm’s clients have decided to leave Russia and would not want to return even after the end of the war in Ukraine. He also says that these companies belong to different sectors of the economy.

Thus, Russia faces a significant loss of important technologies and may have serious problems maintaining certain high-tech manufacturing processes.

“It certainly suggests a significant degree of damage to the Russian economy,” Zucker told Reuters.

Follow the latest events of the 764th day of the war in Ukraine LIVETEXT on HOTNEWS.RO.