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Article

1 Mar 2022

Author:
Stephanie Baker, Bloomberg

Pressure mounts as list of foreign companies pulling out of Russia grows

Pikist.com

The List of Foreign Companies Pulling Out of Russia Keeps Growing, Bloomberg, 1 March 2022

The invasion of Ukraine is causing a mass exodus of companies from Russia, reversing three decades of investment by Western and other foreign businesses there following the collapse of the Soviet Union in 1991.

The list of those cutting ties or reviewing their operations is growing by the hour as foreign governments ratchet up sanctions against Russia, close airspace to its aircraft and lock some banks out of the SWIFT money messaging system. With the rouble plunging and the US banning transactions with the Russian central bank, operating in Russia has become deeply problematic. Some companies have concluded that the risks, both reputational and financial, are too great to continue...

Russia’s largest foreign investor, BP Plc, led the way with its surprising announcement on Sunday that it would exit its 20% stake in state-controlled Rosneft...Shell Plc followed on Monday. Citing Russia’s “senseless act of military aggression,” it said it is ending partnerships with state-controlled Gazprom, including the Sakhalin-II liquefied natural gas facility and its involvement in the Nord Stream 2 pipeline project, which Germany blocked last week...

Equinor ASA, which is Norway’s biggest energy company and majority owned by the state, also announced it will start withdrawing from its joint ventures in Russia... France’s TotalEnergies SE, which is involved in major liquefied natural gas projects in Russia, said it will no longer provide capital for new developments in the country, a modest concession to the mounting political pressure. Among other major energy companies, Exxon Mobil Corp. oversees the Sakhalin-1 project with Rosneft and companies from Japan and India...

Norway’s sovereign wealth fund, the largest in the world, said it’s freezing Russian assets worth about $2.8 billion and will come up with a plan to exit by March 15. Major law and accounting firms are also taking stock and facing potentially an enormous fallout. Baker McKenzie said it will sever ties with several Russian clients in order to comply with sanctions...London-based Linklaters said in a statement it was “reviewing all of the firm’s Russia-related work.” KPMG LLP said it’ll cut ties with certain clients subjected to the recent wave of sanctions against Russia, according to a LinkedIn post by its U.K. chief, Jonathan Holt...

Pressure on others with sales and joint ventures in Russia is mounting. Daimler Truck Holding AG, one of the world’s largest commercial vehicle manufacturers, said it will stop its business activities in Russia until further notice and may review ties with local joint venture partner Kamaz PJSC... Volvo Car AB and Volvo AB, the truck maker, also announced they are halting sales and production in Russia. Harley-Davidson Inc. said it has suspended its business in Russia...General Motors Co. said it was halting shipments to Russia... In Japan, most of the major carmakers said business with Russia would remain as is, though Mitsubishi Motors Corp. said it would meet to assess the risk of operating there...

Ford Motor Co. said it wasn’t planning to pull out of its joint venture in Russia with Sollers to produce commercial vans, at least not yet. “Our current interest is entirely on the safety and well-being of people in Ukraine and the surrounding region,” Ford said in a statement. “We won’t speculate on business implications.”

Mastercard Inc. and Visa Inc. said they’ve  blocked certain Russian activity from their payment networks to comply with international sanctions. 

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