As of: February 23, 2024, 5:39 p.m
By: Bona Hyun
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Press
Split
Many German companies are still represented in Russia – despite the war in Ukraine.
The Russian defense industry, among others, benefits.
Moscow – Despite sanctions, there are Western companies that are making big profits in Russia.
At the beginning of February 2024, two thirds or 277 of all German companies that were in Russia at the beginning of the invasion were still active there.
The organization B4Ukraine came to the evaluation in its most recent study.
According to B4Ukraine's analysis, Germany is also one of the largest foreign taxpayers to Russia.
German companies do business with Putin – and defend themselves
Russia expert José Campos Nave estimates that 80 percent of German companies are still active in Russia.
That would be around 4,800, because before the outbreak of war there were 6,000, according to the Chamber of Foreign Trade.
The rest are in the process of withdrawing or have already taken this step, the lawyer told Handelsblatt
.
According to Wirtschaftswoche,
companies in the food, agriculture, health and pharmaceutical sectors are particularly
represented in Russia.
Russian President Vladimir Putin is planning higher military spending - with devastating consequences for Russia's economy.
The population suffers from it.
© Sergei Karpukhin / dpa
So far, German companies have defended their business in Russia.
The chemical and pharmaceutical company Bayer, for example, explained, according to the
Frankfurter Allgemeine Zeitung (FAZ)
, that as a life science company it has an ethical obligation.
“Depriving civilians of essential health and agricultural products would only multiply the number of lives claimed by this war.”
Withdrawal from Russia apparently “unimaginably difficult” for companies
The wholesaler Metro also continues to do business in Russia.
“It is currently the best decision to stick with the business,” said CEO Steffen Greubel in front of the Düsseldorf Business Journalists Association (WPV) of the
world (
November 2023).
Russia is the second largest foreign company for his company behind France, works profitably and generates cash flow.
“We are sticking with it because it has great economic importance for us,” said Greubel.
Metro currently generates around ten percent of its group sales in Russia.
In addition to profit, legal hurdles could also be a reason why some companies are hesitant to withdraw from Russia.
Companies that want to leave the country are increasingly finding that “the separation process is unimaginably difficult,” Campos Nave told Handelsblatt
.
The withdrawal is a process that cannot be resolved legally in weeks or months, but sometimes only in years, adds an anonymous expert.
Despite the Ukraine war: Germany continues to do business with Russia
The Russian defense industry also appears to benefit from business with Western companies.
According to B4Ukraine, “there is not a single Russian tank or aircraft whose parts were not manufactured using foreign-made CNC machines.” The CNC machines are computer-controlled machine tools.
Between January and October 2023, Russian imports of these computer-controlled precision systems climbed to 270 million euros, which was 33 percent more than in the previous year.
Germany was the largest supplier with 42 percent, ahead of South Korea (20.7 percent) and Taiwan (19.5 percent).
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In this context, an analysis by the London organization Conflict Armament Research (CAR) in London is also very explosive.
When the rocket debris was examined, it emerged that a total of 290 electronic parts were installed in a North Korean rocket that was used in the Ukraine war.
Around three quarters of these came from companies in the USA.
More than one in ten parts, almost twelve percent of the components, came from German companies, others from Singapore, Japan and Switzerland.
Sanctions against Russia: trade collapses massively
Overall, German trade with Russia shrank by three quarters to 12.6 billion euros in 2023 as a result of the sanctions against Russia.
According to the Eastern Committee of the German Economy, trade with Russia as a whole recorded a historically unprecedented slump of 75 percent last year.
“Imports, which were previously dominated by energy sources, fell by 90 percent to just 3.7 billion euros after the start of the oil embargo in early 2023,” it said.
The raw materials power, once an important gas and oil supplier for Germany, fell to 38th place among trading partners behind Slovenia (2022: 14th place).
(bohy)