ST PETERSBURG, Russia (Reuters) -Russia’s Prosecutor General Igor Krasnov, who has led the state’s efforts to seize property worth 2.4 trillion roubles ($31 billion), on Friday said foreign companies that return to the country would be watched closely to ensure Russia benefited.
Moscow has placed around a dozen foreign-owned assets under state management in the more than three years that Russia has been fighting in Ukraine and prosecutors have stepped up the seizure of domestic assets through the courts this year.
Now, as the economy begins to slow after two years of growth fuelled by high military spending, Russian officials are trying to find the balance between insulating the economy from exposure to Western nations it considers unfriendly and the need for growth to keep funding the conflict in Ukraine.
“We will closely follow the government’s actions,” Krasnov said. “That is, who will come… on what terms they will come.”
“We will definitely look at making sure that the conditions under which our (Russian) business operates are better (when Western business returns),” Krasnov said.
It must be profitable for Russia’s own firms, he said.
Russia is prioritising domestic companies, some of whom have taken market share vacated by Western firms, such as McDonald’s and Unilever, that have left since Russia launched the conflict in Ukraine.
President Vladimir Putin on Friday said the Russian economy could not develop effectively without investment and said Moscow would create conditions to make foreign partners feel comfortable.
He said Russian companies should fulfil legally binding buybacks with foreign companies, but stressed that Russia would support measures that benefit its own interests.
“If someone left for political reasons, under pressure from their own political elites, their countries, then this means they are unreliable partners,” Putin said.
WESTERN FIRMS ABSENT
Kirill Dmitriev, chief of Russia’s sovereign wealth fund, has said that U.S. companies are in talks to return to Russia, although lawyers and investors have told Reuters that sanctions must be lifted before any significant influx can take place.
Finance Minister Anton Siluanov told the Izvestia daily on Friday that no foreign companies had yet submitted requests to return.
“There are no applications for entry yet, but I feel that the situation is changing and interest in investing in Russia is growing,” Siluanov said.
The sparse Western presence at Russia’s forum suggests otherwise, with some analysts also pointing to concerns about property rights.
Two sources from Russia’s energy and banking sectors said some companies may be interested in returning as there could be money to be made, but not in the current situation.
Assets owned by French yoghurt maker Danone and Danish brewer Carlsberg are among the foreign assets taken under state control and sold to Kremlin-friendly buyers since 2022.
($1 = 78.4955 roubles)
(Reporting by Anastasia Lyrchikova, Oksana Kobzeva and Darya Korsunskaya; Writing by Alexander Marrow; Editing by Toby Chopra)
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