Government Supports Idea of Nationalizing Assets of Companies Pulling out of Russia

Government Supports Idea of Nationalizing Assets of Companies Pulling out of Russia

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The United Russia party has initiated the proposal to nationalize enterprises belonging to Western companies leaving Russian market. In all such cases, it was a purely political decision on the part of foreign organizations, said the press service.

Meanwhile, the government commission on legislative activities has approved the second package of measures to support the Russian economy under sanctions. It provides for the first step to nationalize the property of foreign companies leaving the Russian market. The companies in question are proposed to be placed under external management by court, which should prevent bankruptcy and save jobs. It is referred to the organizations that are more than a quarter owned by citizens of “unfriendly” states.

To abandon external administration, the owners must either return to work in Russia or sell their shares with the preservation of the business and jobs. Otherwise, a court decision appoints a new administration for three months, creates a new organization, and puts its shares out to tender while the previous organization is liquidated.

The buyer of the new organization must retain at least two-thirds of the staff and continue operations of the old organization for at least a year. Russia has already compiled a list of foreign companies that can be nationalized. Among others, this list includes such companies as Volkswagen, Apple, IKEA, Microsoft, IBM, Shell, McDonald's, Porsche, Toyota, etc.

The total amount of obligations of these organizations to citizens, the state and counterparties is more than 6 trillion rubles ($49.84 bln), said Oleg Pavlov, head of the Public Consumer Initiative organization. That is, this amount is equal to their revenues in Russia for the past three years. According to him, the management of these companies can be held “criminally liable” for premeditated bankruptcy and fraud on a large scale.

In addition, to ensure socio-economic stability, the relevant committees of the State Duma lower house of Parliament have prepared amendments suggesting the introduction of state regulation of prices for a number of goods and services. For example, Deputy Secretary of the General Council of the United Russia party, Duma deputy Alexander Khinshtein said that the party needs to take a principled stand and propose legislative initiatives that would establish a mechanism for regulating specific prices. Khinshtein believes that prices for food, baby food, children's goods, construction materials, agricultural fertilizers, agricultural machinery and parts, household chemicals, pet supplies, medicines and other goods and services. According to him, United Russia receives a huge number of appeals from citizens about the rise in prices on a daily basis.

“Unlike imported goods, the cost of which is pegged to foreign currency, the increase in the cost of domestic goods can only be explained by the desire to profit from the situation which is difficult for everyone,” Khinshtein said in conclusion.

First vice-speaker of the State Duma Alexander Zhukov, in turn, said that “when proposing regulatory measures, we should keep in mind that when non-market regulation of prices is applied, it can cause a shortage of goods as a side effect.” That is why Zhukov suggested “to cooperate with the government on the commodity classification and the measures, by which we want to compete on prices.”

Previously, the large retail chains Perekrestok, Pyaterochka, Karusel, Atak, Magnit, Okay and Auchan limited mark-ups on some categories of socially important goods to 5%. A number of retailers imposed restrictions on the sale of a large number of goods of the same name to combat resellers. This happened against the background of a sharp collapse of the ruble after the sanctions against Russia imposed by Western countries.

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