Russia has threatened new strikes against the assets of European companies
Russia may continue to transfer the assets of European companies that have remained in its market to state control. Russian officials and business representatives told Reuters this on condition of anonymity, and one high-ranking official said bluntly, “Let them be afraid.” In recent weeks, the Russian assets of Nestlé, Metro, and Auchan have already been placed under temporary state control.
Russia is stepping up pressure on major European companies that are still operating in its market. According to Reuters, their Russian assets have become one of the main targets of the Kremlin’s new campaign. Several sources within the Russian government and business community told the agency about this. They spoke on condition of anonymity because they were not authorized to publicly comment on potential government decisions.
A high-ranking Russian official told Reuters that Moscow may resort to so-called asymmetric measures in response to sanctions and other decisions by European Union countries. “The time has come for asymmetric measures. Let them think about what measures they are taking against us and what sanctions they are imposing,” he said.
When journalists asked which companies might be the next targets and whether Russia might place the Russian branches of the Italian bank UniCredit and the Austrian bank Raiffeisen under temporary administration, the official replied briefly: “Let them be afraid.” Reuters does not claim that these two banks will actually be the next targets. The point is simply that the Russian official did not rule out such a scenario.
Another source for the agency—a representative of a Russian corporation—stated that European companies are allegedly deliberately holding back the development of their Russian subsidiaries. According to him, this ultimately harms the Russian economy. At the same time, a representative of one of the European companies that continues to operate in Russia told Reuters that the business is currently counting on the current situation remaining unchanged in the near future. In other words, European companies that have remained in the Russian market do not expect an immediate transfer of all assets to state control. However, Moscow’s latest decisions show that the risk for such businesses remains.
What Has Already Happened to European Companies
In September, Russia already transferred the Russian assets of Swiss food manufacturer Nestlé, French retail chain Auchan, and German trading company Metro AG to temporary state administration.
Regarding Nestlé and Auchan, Vladimir Putin’s decree provided for the transfer of their Russian assets to the management of L.E.V. Management. Reuters noted that temporary management does not necessarily mean an automatic change of ownership. However, Russia has previously used this mechanism as a way to tighten control over foreign businesses, and in some cases, it has ultimately led to the sale of assets to Russian buyers.
In Metro’s case, the situation unfolded in a similar manner. On September 28, Putin signed a decree placing the German company’s Russian assets under temporary administration. Metro itself reported that it no longer controls the operations of its Russian division. Metro continues to operate in Russia, where it has 91 wholesale stores and approximately 9,000 employees. The company’s Russian business is now effectively controlled by a state-appointed temporary administrator.
The September decree regarding Nestlé and Auchan also mentioned the stake held by the French group Adeo in the Russian company Le Monlid, which operates under the Lemana PRO brand—formerly Leroy Merlin.
How Russia Takes Control
The Russian authorities use a temporary administration mechanism for such decisions. It was introduced by Presidential Decree No. 302 of April 25, 2023. The document refers to the temporary administration of specific assets in response to the actions of so-called “unfriendly” states. This decree is officially published in the State Register of Legal Acts under number 0001202304250033.
It is important to distinguish between temporary administration and outright confiscation. When an asset is transferred to temporary administration, the foreign owner does not necessarily lose ownership immediately. However, they may lose the ability to independently manage their Russian business. Reuters noted that this very scheme could ultimately pave the way for a change in ownership. Russia has been using this mechanism for several years now. Previously, assets of international companies such as France’s Danone and Denmark’s Carlsberg came under state control. In some cases, after being placed under administration, the assets were eventually sold to Russian buyers.
According to Reuters, citing the Russian state news agency TASS, since the start of the full-scale war, Russia has placed 135 companies linked to foreign businesses under temporary administration. The vast majority of these companies are linked specifically to EU countries. At the same time, similar measures have also affected certain American companies.
How the Kremlin Explains Its Actions
The Kremlin claims that the new decisions are linked to the growing involvement of European countries in the war against Ukraine. Putin’s press secretary, Dmitry Peskov, stated that the decisions regarding foreign companies could be reversed. At the same time, he added that the Kremlin currently sees no grounds for doing so. “So far, we see no grounds for revising these decisions. We hear no reasonable voices calling for dialogue or trying to rectify the situation,” Peskov said.
Russian authorities also accuse European countries of supplying weapons to Ukraine, providing intelligence, and generally participating in the war. Russian Foreign Minister Sergey Lavrov stated that Moscow views this as a war that Europe is allegedly waging against Russia. The European Union, for its part, accuses Russia of being unwilling to end the war and continues to apply sanctions pressure. Last week, the EU extended sanctions against more than 3,000 individuals and organizations linked to Russia. Moscow, in turn, is also criticizing Europe for freezing approximately €210 billion in Russian state assets.
Reuters notes that Russia’s campaign against foreign businesses has broadened precisely against the backdrop of deteriorating relations between Moscow and Europe. At the same time, major American companies have so far been largely unaffected by such decisions, although some U.S. firms have also been placed under temporary administration.
For European businesses, this means increased risks regardless of whether a company plans to remain in Russia, scale back its operations, or exit the market. Following the latest decisions regarding Nestlé, Auchan, and Metro, Russian authorities have effectively made it clear that other large foreign companies cannot be certain they will retain control over their assets either. That is precisely why Reuters views the Russian official’s statement, “Let them be afraid,” as a direct signal to European businesses.
