BREAKING

Russia sets terms for withdrawal of unfriendly countries firms

By Al Mayadeen English
Source: Agencies
31 Dec 2022 10:01

After months of Western draconian sanctions on Russia, Moscow sets conditions for companies from countries it deems hostile to withdraw from Russia.

A sign on display outside Russia's Finance Ministry building in Moscow (Reuters)

Russia's Finance Ministry published a list of conditions for corporations from unfriendly countries to exit from Russia, requiring them to sell their stocks at a 50% discount of their market value.

The Ministry's committee for monitoring foreign investment in Russia has established the conditions that must be met before corporations from hostile nations are granted permission to withdraw from Russian assets.

The Ministry's document detailed that the first condition is "availability of independent assessment of market value of assets." Second, the sale of assets should be carried out "with a discount of no less than 50% of the market value of the corresponding assets." Third, it is necessary to "establish key performance indicators for new shareholders." The fourth condition is "availability of installment payment for 1-2 years and (or) obligation to voluntarily transfer of funds to the federal budget in amount of not less than 10% of the amount of the transaction."

Furthermore, the amount of profit to be paid should not exceed 50% of the previous year's net profit.

It is worth noting that the commission will also consider "the findings of retrospective investigation of profit (dividend) payment for past periods," as well as foreign shareholders' readiness to continue commercial activities in Russia.

Positions of federal administrative authorities and the Central Bank on the importance of the organization's actions and their impact on Russia's technological and production sovereignty, as well as its social and economic development, will be considered.

Federal executive authorities could also set "quarterly key performance indicators for organizations" and "the prospect of quarterly dividend payment if the firm meets the defined key performance indicators."

In a similar context, Russian President Vladimir Putin previously established an overall ban on investors from hostile nations exiting Russian investments in specified industries without specific presidential authorization.

This comes as economic sanctions against Moscow resulted in a hike in the prices of global fuel and food, boosting Russia's trade balance, financing its operation, and putting a significant strain on Western economies, according to analysts.

In short, Russia is seemingly winning the economic war the western nations have been waging with an aim to force it to back down on Ukraine due to the impact of the country’s rapid change of its policies.