Russia is Bankrupting Foreign Companies that are Shutting Down Production

Russia will promptly bankrupt foreign companies that have stopped production because of the war, a government official was quoted as saying by Interfax today.

The measure allows in practice the Russian state to confiscate the material and financial assets of these companies.

Foreign shareholders leaving the Russian Federation may transfer shares to local partners and then return them; foreign companies closing production will go through an accelerated bankruptcy procedure, First Deputy Prime Minister Andrei Belousov said at a meeting with businessmen, the agency reported.

According to him, today there are three options for developing relations with foreign partners against the background of the economic situation and sanctions.

“First, the company continues its full-fledged work in Russia. At the same time, the supply of raw materials, components needed for the production process is provided in full, the obligations related to the labor rights of employees are fulfilled,” Belousov said.

“In the second option, foreign shareholders transfer their share under the control of Russian partners and may subsequently return to our market. This option was discussed with the Russian business community, it is ready for that, some investors have already taken advantage of this option,” said the First Deputy Prime Minister.

“And the third option is when the company stops working in Russia, closes production and fires employees. We are treating this as intentional bankruptcy. In this case, we will intervene through the accelerated insolvency procedure, as the absolute priority for us is to maintain the employment and social well-being of our citizens so that conscientious entrepreneurs can ensure the effective functioning of business,” he said.

Belousov also noted that the government has always assumed the need for a constructive dialogue with foreign business and the mutual fulfillment of obligations undertaken by the countries.

/ClubZ