Russia warns Western companies of arrests, asset seizures over government criticism
Targeted companies moving executives out of Russia in wake of threats
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Russian prosecutors have issued stern warnings to Western businesses operating in the country, threatening to arrest corporate leaders who criticize the Kremlin or to seize the assets of companies that pull out of the nation.
Companies that received the warning include Coca-Cola, McDonald's, Procter and Gamble, IBM and Taco Bell owner Yum Brands, according to The Wall Street Journal, citing people familiar with the matter. The prosecutors also threatened to sue the companies and seize assets including trademarks.
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The warnings have prompted some of the targeted companies to move executives out of Russia, the Journal reported. At least one company has limited communications between its Russian business and the rest of the company, citing concerns that emails or text messages between colleagues could be seized.
People enter a McDonald's restaurant in Moscow, Russia, April 24, 2018. (Reuters/Tatyana Makeyeva/File Photo)
Since Russian President Vladimir Putin launched an invasion into Ukraine on Feb. 24, hundreds of Western companies have started to sever ties with Moscow under intense pressure from investors and consumers, as well as a barrage of sanctions from the U.S. and European Union. The pace has intensified in recent days as the unrelenting fighting in Ukraine spawns a massive humanitarian crisis.
Putin has responded to the withdrawals by saying he favors a plan to "bring in outside management and then transfer these companies to those who want to work" if companies leave Russia.
Many companies have said their decision to stop operations is temporary, while others blamed their departure on supply-chain disruptions caused by the sanctions. Others have pledged to leave permanently.
Russian President Vladimir Putin speaks as he attends the G20 summit via videoconference in Moscow, Russia, Saturday, Oct. 30, 2021. (Evgeniy Paulin, Sputnik, Kremlin Pool Photo via AP / AP Newsroom)
Coca-Cola last week said it would suspend operations in Russia, which accounts for about 1% to 2% of its revenue. Yum Brands also said it would temporarily close its 70 KFC locations, in addition to signing an agreement with Pizza Hut to shut down business at 50 locations.
On top of that, there have been Wall Street banks including Goldman Sachs, retailers like Levi Strauss and tech companies including Apple that have pledged to pull back their business in the wake of the war. Exxon Mobil and BP have also made plans to exit from Moscow.
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The White House has condemned efforts by Russia to nationalize businesses.
"Any lawless decision by Russia to seize the assets of these companies will ultimately result in even more economic pain for Russia," White House press secretary Jen Psaki tweeted last week. "It will compound the clear message to the global business community that Russia is not a safe place to invest and do business."