In a swift move, Russia has increased its pace of domestic asset seizures this year following recent court rulings mandating the transfer of assets from a prominent grain trader, Domodedovo airport in Moscow, and key warehouse facilities to state control.
Since February 2022, foreign companies have faced the looming risk of asset seizure in Russia. The rationale cited by Moscow revolves around strategic stability and domestic security, extending the scope of asset targets to include domestic entities.
Recent court documents and insider sources revealed that a major grains trading house in Moscow, along with 16 warehouses owned by Russia's largest warehouse proprietor, were placed under state management on January 31.
Despite several requests for comment, the General Prosecutor's Office remained silent on these cases.
Legal experts interviewed by Reuters anticipate a surge in asset seizure cases in critical sectors of the economy based on foreign ownership, signaling a shift in the business landscape for entities with non-Russian ties.
According to Artem Zhavoronkov, a partner at the Russian law firm Nordic Star, the message to owners with dual citizenship, particularly from "unfriendly countries," is clear: "Either renounce your foreign citizenship or risk losing your business in Russia."
The narrative surrounding these actions ties back to the Kremlin's definition of states imposing sanctions on Russia over events in Ukraine as "unfriendly."
Rodnie Polya, which once controlled 14% of Russia's grain exports, has gradually seen its market share diminish, culminating in the transfer of its assets to Rosimushchestvo, Russia's federal property management agency, on February 5.
In a bid to salvage the business, owner Petr Khodykin reportedly obtained a residency permit in the United Arab Emirates. Despite legal deliberations, including contemplating an appeal to the constitutional court, Rodnie Polya's assets were ultimately relinquished to state control.
The landscape for businesses in Russia is evolving rapidly, with a presentation from a law firm warning that any entity holding assets deemed strategic for Russia or failing to invest in local businesses could be at risk.
Court filings on February 5 highlighted a similar case involving the oil services company Borets, whose ultimate holding company is based in the UAE. Borets has not provided a response to the proceedings.
While some individuals dismiss concerns over the broader implications of Rodnie Polya's seizure, legal experts view the state's actions as an endeavor to tighten oversight over assets deemed strategic in the current political climate.
With an economist pointing out the fiscal implications and potential consequences of these actions, the unsettling trend of asset seizures in Russia continues to raise apprehension about the future.