The corporate exodus from Russia since the start of the invasion of Ukraine in 2022 has cost foreign companies more than $107 billion in write-downs and lost revenue, according to a Reuters analysis. The scale of losses has increased by a third since the last measurement in August last year, underscoring the scale of the financial blow the invasion has dealt the corporate world.
"As the Russian invasion continues as Western military aid weakens ... companies that still want to exit Russia are likely to face additional difficulties and be forced to accept larger write-offs and losses," Ian Massey, head of the department, told Reuters. for corporate intelligence at S-RM. He added that Russian President Vladimir Putin was given a new mandate in the recent elections to continue isolation from the West, which includes additional asset seizures and political pressure.
Moscow demands discounts of at least 50% on the sale of foreign assets and has steadily tightened requirements for exiting Russia, often accepting nominal fees of as little as one ruble.
Western countries froze about $300 billion in gold and foreign currency reserves of the Bank of Russia after the Russian invasion.
Russia has vowed to retaliate against an EU proposal to distribute billions of euros in proceeds to Russian frozen assets, warning of catastrophic consequences. Western banks are also worried about the legal consequences that the possible seizure of income on Russian assets could bring, reminds Reuters.
On the other hand, Moscow has already taken temporary control over assets owned by several Western companies. "There is no Western asset in Russia that can be considered safe as long as the Kremlin is at war," Messi said.
Russia's state agency RIA calculated that the West would lose assets and investments worth at least $288 billion if Moscow retaliated.
However, Moscow's hard-line approach harms Russia as well.
Lawyer Jeremy Zucker, an expert on sanctions, said that a surprisingly large number of his firm's clients from various industries have decided to leave Russia entirely and are unlikely to want to return even after hostilities end.
As a result, certain technologies also left the country so that Russia can no longer support some types of high-tech production, Zaker said. "For me, this is an indicator of a significant degree of damage to the economy," he told Reuters.
In a 2022 decree, Moscow barred investors from "hostile" countries - those that have imposed sanctions on Russia over its actions in Ukraine - from selling stakes in key energy projects and banks without explicit presidential approval.
Meanwhile, many manufacturers of consumer goods are holding back from exiting Russia entirely, arguing that ordinary Russians rely on their products.
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