The incredulity of the Russian Ukraine invasion has sparked a change in opinions within the west, leading to the significant flight of capital. Many European and US firms have closed down commercial activities in Ukraine.
The outrage over Russia’s brutal attack on Ukraine has led foreign businesses to rethink their business relationship with country.
In the past week, since Russia has attacked, some companies have declared plans to leave the country, and many others are evaluating their business relationships and commercial ventures with Russia.
The Russian ruble is plummeting to record lows, as Western sanctions targeting Russian banks and the country’s access to the SWIFT international payment system take their toll. It has prompted a massive exodus of capital from Russia, with investors moving their money abroad in droves. The losses suffered by the ruble have also pushed up prices of goods and services in Russia, prompting fears of rampant inflation.
On Tuesday, Russian Prime Minister Mikhail Mishustin states that Russia has announced a short-term restriction on the foreign investors for selling Russian assets. “In the current approved situation, the foreign entrepreneurs are compulsory to be guided not by economic considerations; however, they must make decisions under the pressure of political factors.”
Here is a look at a few of the most important announcements from companies about Russia until now.
Oil giants evacuate:- The energy sector is Russia’s most significant and most essential announcement until now. BP, the UK’s oil giant, announced over the weekend that it would end its 19.75% stake in Rosneft Company, which is Russia’s state-owned giant. The stake makes BP the most extensive international investor in Russia, and the decision to leave could result in a write-off of $25 billion.
Following the announcement of BP, Shell also confirmed it would end the Russian operations. Shell’s decision will mean withdrawing its 27.5% part in the Sakhalin 2 LNG plant, owned 50% by the P JSC Gazprom company. The Shell is the world’s biggest LNG trader.
On Monday, another European energy firm, the Norwegian state-backed Equinor, stated that it would begin ending its joint ventures in Russia. In Russia for more than 30 years, the company has collaborated closely with Rosneft.
This week, Exxon Mobil Corporation declared it would be separating its Russian gas and oil concerns worth roughly $4 billion. France’s TotalEnergies SE announces it will no longer offer the funds to develop new Russian projects but remains active within the country.
Siemens take action:- the industrial conglomerate Siemens AG has halted a significant portion of its business activities within Russia on Wednesday.
A Spin-off Company, Siemens Energy AG, has declared that it will also halt any new business launched within Russia. The company maintained a presence in Russia for 170 years, and it employs thousands of people in Russia. Siemens said that it has “all international deliveries and new businesses to Russia is halt.
Iconic Brands are cutting ties: On Tuesday, the State of the Union address, US President Joe Biden announced that the US was joining Canada and the EU to prohibit Russian aircraft from the country’s airspace.
Boeing Company has stated that it will cease significant operations in Russia, including technical assistance, maintenance, and parts for Russian airlines. The Boeing European competitor Airbus SE on Wednesday, the company says that it has stopped the supply of spare parts and support services to the Russian airlines. Maersk has stated that it will temporarily suspend shipping containers to and from Russia.
On Monday, Apple declares that it has halted the sales of its physical goods in Russia, which majorly includes iPhones. The company has also blocked live and traffic updates in its maps app “as a security and preventative measure for the Ukrainian people.” The company has also restricted the use of its Apple Pay service.
Google has removed Russian publications and news sources from the news feed. Facebook parent company Meta has announced it will limit Russian state news sources to not feature as prominently on news feeds.
Microsoft declares it will take down mobile applications from Russia’s state-owned media company RT from its Windows application store. Snap is the company behind Snapchat; the messaging app Snapchat has shut down the display of ads in Ukraine, Belarus, and Russia.
The US payment card firms MasterCard and Visa have removed some Russian banking institutions from their worldwide networks.
A few accounting, legal, or consulting businesses are looking into Russian operations; however, they have come under criticism for not pulling out of the country.
KPMG has announced that it will terminate certain client relationships to “comply with the new laws.” McKinsey states that it will not work on any Russian government bodies; however, it is not pulling out of Russia.
Carmakers stop exports:- Some carmakers have also taken action against Russia. Ford has declared that it will suspend the joint venture with the van maker JV. This statement follows General Motors and Germany’s Daimler Truck to cease operations in Russia. GM has also stopped exports of vehicles to Russia, following Sweden’s Volvo, the first global carmaker company to stop exporting. The French carmaker Renault Company states it will cease certain operations at assembly plants in the country in the coming week. Germany’s BMW Company has halted exports and plans to stop production in Russia. Volkswagen has stated the suspension of the deliveries of the car currently located in Russia to local dealers.
Hollywood companies step up:- Many entertainment companies are cutting their activities in Russia. Hollywood studios Sony Pictures, Warner Bros, and Disney have stopped the release of their upcoming films that are scheduled to release in Russia in March.
Netflix, the popular streaming service, has announced that it will not comply with new Russian rules to carry 20 state-backed channels on its platform in the country. The new rules, which were supposed to effect on March 1st, required Netflix to carry these channels to continue operating in Russia. However, Netflix has decided that the cost and effort of complying with these new regulations are not worth it and has announced that it will instead leave the Russian market.
Commercial relationships in football are also reviewed. German Bundesliga club Schalke 04 has stopped its long-standing sponsorship agreement with Gazprom, as has European football governing body UEFA.
In the meantime, clothing manufacturer Adidas has pulled out of its commercial agreement with the Russian Football Union.
Devoted my whole life to words - reading, writing and trying to be original on social media. Got certified in digital marketing - still not cool enough to be an influencer. Finished a master’s degree focused in Literature, Publishing, Mass Media. Hobbies include traveling, reading and hoping that yoga will be the thing to finally teach me some patience. Would like to take over the world at some point, but that’s an optional dream. Maybe modern tech can help me do that?