A legislative commission led by the ruling party in Russia approved measures on March 8 that would pave the way for the nationalization of property of Western companies now exiting the country in protest of the military attacks on Ukraine.
United Russia, the dominant political party in the Russian parliament’s lower house, the State Duma, said that the measures seek to prevent bankruptcies and preserve jobs at organizations that are more than 25 percent foreign owned by entities of “unfriendly governments.”
The commission’s role includes the review of laws that the government intends to propose to the State Duma.
The motion was proposed after a senior member of United Russia, Andrei Turchak, secretary of the party’s general council, proposed the nationalization of foreign-owned businesses and factories in retaliation to Western sanctions.
“United Russia proposes nationalizing production plants of the companies that announce their exit and the closure of production in Russia during the special operation in Ukraine,” wrote Turchak in a statement published on the party’s website.
“We will take tough retaliatory measures, acting in accordance with the laws of war,” said Turchak, who views the sanctions as a form of economic terrorism against the citizens of Russia.
“This is an extreme measure, but we will not tolerate being stabbed in the back, and we will protect our people.”
“This is a real war, not against Russia as a whole, but against our citizens,” he said.
United Russia, which is headed by Russian President Vladimir Putin, has been pushing for the Russian government to take control of the operations of the dozens of Western companies that have suspended their services in the country.
The new measures include a provision that will enable members of the board of directors at those targeted organizations, or alternatively, the Russian federal tax service, to appoint external managers to keep operations running.
Foreign owners will still be able to object to the appointment of external management within five days if they agree to resume operations, or sell their interests in the designated companies.
If the owners fail to meet those requirements, a Russian court will appoint external management and shares of the organization will be put up for sale.
Nestle, Coca-Cola, PepsiCo, Philip Morris, and Imperial Brands on March 8, joined the list of multinationals fleeing Russia, as pressure mounts from consumer activists in the West to take a stand against the invasion of Ukraine.
Procter & Gamble and Unilever had already paused their investments in Russia, while McDonald’s just halted its operations at its 847 restaurants in Russia after threats of boycotts from local governments in the United States and social media attacks.
Ford, Adidas, and Nike have also announced temporary shutdowns of stores and factories in Russia in solidarity with Ukraine and supply chains face disruption due to the conflict.
The Western-imposed sanctions have targeted Russian-owned banks and oligarchs, and have discouraged foreign investment in the nation.
The European Commission is said to be preparing new sanctions against additional Russian oligarchs and politicians and three Belarusian banks.
On March 8, the White House announced that the United States will begin banning Russian oil imports in addition to its other sanctions.In addition to fossil fuels, Russia is also one of the biggest suppliers for ingredients used to make agricultural fertilizer, such as potash.
Meanwhile, Norway-based Yara, one of the world’s top fertilizer makers, said on March 9 that it would slash its ammonia and urea output in Italy and France due to surging gas prices, impacting fertilizer supplies for Europe.
Russia is also a large supplier of metals like mercury, which are used in computer chips.
But although the war in Ukraine has inflated the value of commodities which Russia normally exports, the sanctions have so far largely barred Moscow from taking advantage of the high prices.
