September 27, 2023

Athens News

News in English from Greece

Western companies remaining in the Russian Federation earn good money, but their profits are blocked

More than $18 billion in profits earned by companies from countries “unfriendly” to the Russian Federation over the past year were blocked.

How reports The Financial Times, reporting profits for 2022, left business companies operating in Russia with nothing. American companies received the most – their profits amounted to $4.9 billion. German, Austrian and Swiss companies earned slightly less: $2.4 billion, $1.9 billion and $1 billion, respectively.

Local income of companies, from BP to Citigroup, was blocked in the Russian Federation after the introduction in 2022 of a ban on the payment of dividends to enterprises from “unfriendly” countries – the United States, Great Britain and members of the European Union.

Such transactions, the publication notes, can be approved under exceptional circumstances, but negligible approvals for withdrawals have been issued. Some foreign companies have tried to sell their Russian subsidiaries, but any agreement requires Moscow’s approval and involves significant discounts.

Among the companies from “unfriendly” countries that continue to actively operate in the Russian Federation is the Austrian bank Raiffeisen, the largest Western lender in Russia. It reported the country’s largest profit in 2022, at $2 billion. And while Raiffeisen said it had no access to its profits in the country, it did not write down the value of the business.

American Philip Morris and PepsiCo earned $775 million and $718 million, respectively. The profit of the Swedish truck manufacturer Scania in the Russian Federation last year amounted to $621 million.

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