Counter-sanctions: Russia threatens companies with expropriation - and shoots itself in the foot

Created: 03/09/2022, 14:08

By: Jonas Raab

An Ikea branch in Moscow: Like many other Western companies, the furniture store has now closed its Russian locations.

© picture alliance/dpa/EPA |

Yuri Kochetkov

Russia is preparing sanctions against the West.

Economic experts expect Putin to ruin the economy in his own country even more than the Ukraine war is doing anyway.

Moscow - Currency ban, gas supply boycott and expropriations: The Kremlin is threatening the "unfriendly countries" of the West, which imposed tough sanctions against Russia in the wake of the Ukraine war, with ever more severe countermeasures.

Should ruler Vladimir Putin go through with the threatened sanctions, he could be doing his country a disservice, because experts expect that this will ruin the Russian economy – and permanently.

Since Monday evening (March 7), the Russian sanctions wheel has been turning faster than it has ever been since Putin sent his troops towards Kyiv.

Deputy Prime Minister Alexander Novak spoke of the right to make "mirror-justified" decisions against the West and in particular threatened a gas embargo by shutting down the Nord Stream 1 pipeline. Andrei Turchak, Secretary General of the ruling party United Russia, called on the same evening for the nationalization of the Russian subsidiaries of Western countries companies when they stop manufacturing in Russia.

Say: Turtschak threatens expropriation.

War in Ukraine: Western companies shut down factories in Russia - the Kremlin reacts

Turchak described the production stop that many international companies had implemented in the course of the Russian war of aggression in Ukraine as “deliberate bankruptcy” and part of the West’s “war of sanctions”.

Deputy Prime Minister Andrei Beloussov, responsible for the economy, explained what the expropriation of these companies could look like.

He threatened with two options.

On the one hand, Belousov spoke out in favor of accelerated insolvency proceedings for the branches of Western companies that are now letting their production lines stand still.

That probably means nothing more than that insolvency administrators should be appointed to sell the affected plants to Russians.

On the other hand, the Russian Deputy Prime Minister suggested that foreign companies spin off their plants in Russia from the parent companies and transfer them to independent companies and then hand them over to previous Russian partners.

Ukraine conflict: Kremlin threatens counter-sanctions - "cold expropriation at a dumping price"

That would be a "cold expropriation at a dumping price".

The

quotes an unspecified insider of a German company in Russia.

Michael Harms, executive director of the Committee on Eastern European Economic Relations, explains that many Russian entrepreneurs and business representatives are “appalled and shocked” by the threats.

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Nils Schmid, foreign policy spokesman for the SPD parliamentary group, is of the opinion that Russia is primarily harming itself with such quick-witted actions.

"The threatened counter-sanctions would further strengthen Russia's decoupling and its path to economic backwardness," he told the

.

Nord Stream 1: Will the Ukraine war stop gas deliveries - experts doubt

In particular, the threatened Nord Stream 1 stop causes astonishment, because Russia fills its treasury in fact solely with its energy resources and their export - and because, according to Russia expert Gerhard Mangott from the University of Innsbruck, a Nord Stream 1 embargo is tactically "incomprehensible " would.

Mangott argues that the pipeline is the only line that bypasses both Ukraine and NATO country Poland.

He expects that the Yamal pipeline, which runs through Poland, or the Ukrainian gas transit will be paralyzed sooner.

What is happening now are just threats, he says.

SPD foreign politician Schmid took a similar stance in the

newspaper: If Putin stops gas exports now, the Kremlin will lose the trust it has built up as a supplier for five decades.

"The reputation as a reliable supplier would be ruined." That would have lasting consequences that Russia cannot financially want.