Over 1600 Firms Remain in Russia Despite Sanctions and Global Exit
Nearly two years since the onset of the Ukraine-Russia conflict, a substantial number of Western companies continue their operations in Russia.
Cameron Jordan
- 2023-12-28
- Updated 02:08 PM ET
(NewsNibs) - Research conducted by the Kyiv School of Economics shows that despite widespread business withdrawals from Russia following its invasion of Ukraine, over 1600 companies are still active in the country. Latvian Television highlighted the presence of several well-known food producers and brands that are also recognized in Latvia, including "Mars", "Pepsico", "Mondelez", "Bonduelle", and "Nestle", with Nestle itself boasting over 2000 different brands. Attempts to reach these companies by LTV for comments on their decision to maintain Russian operations went unanswered.
Justifications and Ongoing Operations
Previously, entities such as "Bacardi", "Phillip Morris", and "Japan Tobacco" have continued their presence in Russia, reasoning that their products are not under sanction and that it would be unethical to cease providing essential items like food. "Japan Tobacco" affirmed its support for Ukraine and has stopped further investments but did not declare any plans to halt operations. Furthermore, "Yves Rocher", "P&G", and "Unilever" also persist in their business activities. "Unilever" has downplayed the significance of their operations to the Russian economy and hinted at a potential market exit.
The technology sector retains its footprint in Russia through firms such as "Xiaomi" and "Alibaba", the latter operating the well-known "Aliexpress" platform in Latvia. Reports from Ukrainian authorities have surfaced alleging that products bought from "Aliexpress" are being used in Russian combat drones, raising ethical and regulatory questions. Despite the imposition of widespread sanctions against Russia, increased trade volumes with non-sanctioning countries suggest a potential bypassing of sanctions, an issue the European Commission intends to address with new measures.
Community Responses and Legislative Proposals
While food products have not been banned from export to Russia, the global discourse on business ethics in such contexts is evolving. In Latvia, a citizens' initiative collected over ten thousand signatures on the portal "Manabalss.lv", pushing for a legislative proposal to be considered by the Saeima to increase taxes on companies that engage with Russia. The initiative proposes an elevated withholding tax rate of 90% on payments to Russia as a punitive and discouraging measure. The European Union remains vigilant and is actively considering additional measures to prevent sanctions evasion and maintain economic pressure on Russia.
