Russia effectively bans Western companies from withdrawing assets in dollars, euros – FT

Russian authorities have made it difficult for Western companies to leave the aggressor state by prohibiting the withdrawal of assets in dollars and euros. De facto Russia has introduced control over the movement of capital, without announcing it, the Financial Times writes with reference to sources.

With such measures, Moscow is trying to combat the weakening of the ruble, whose value against the dollar has fallen by more than 20% since the beginning of 2023. In August, the dollar rate exceeded 100 rubles, which forced the authorities to take "palliative measures". However, "it’s like applying a Band-Aid to gangrene," said the newspaper's source.

These restrictions were added to previously introduced requirements, including a "voluntary" contribution to the Russian budget in the amount of 15% of the deal amount and the sale of assets at a discount of at least 50%.

Now the transaction amount can be agreed in rubles, but if the seller insists on foreign currency, he risks delays and even losses, FT writes.

The outlet's sources say a government commission has unofficially capped at $500 million the maximum amount an "unfriendly" company can withdraw in foreign currency.

And in a recent unnamed agreement for $300 million, the seller was given a seven-day withdrawal deadline, but with a daily limit on transfers from the buyer of $20 million. That is, the company could not receive half of the amount in foreign currency.

Kremlin spokesman Dmitry Peskov told FT that it is the duty of any government to create "the most favoкable conditions for its currency, so we create the most favorable conditions for the ruble."

At a briefing on Tuesday, Peskov emphasized that foreign companies leave the Russian market "on the terms they will be told" by the government commission.

In April 2023, Putin signed a decree that allows the Russian Federation to temporarily control the assets of companies or individuals from unfriendly states, including the United States and its allies.

After the Kremlin seized Danone and Carlsberg, foreign companies that planned to sell their Russian businesses to local companies realized that the same could happen to them.

In July 2023, the German energy giant Wintershall Dea said that the exit from Russia was becoming increasingly difficult due to the unpredictable political situation.

Around the same time, the Heineken company, which found a buyer back in April for its Russian business, announced that the conditions for leaving Russia would be complicated.