Brands that exited the Russian market have yet to submit any paperwork to re-enter
In a chat with journalists at the Mallpic exhibition in Sochi, Roman Chekushov, Russia's Deputy Minister of Industry and Trade, revealed no foreign companies have reached out to return to the Russian market since their departure.
"A brand's comeback is primarily the initiative of foreign companies. As of now, I haven't come across any company or brand owner submitting an application to us," explains Chekushov.
The ministry has brainstormed a strategy for foreign companies seeking a return, but even if Western corporations start considering a return, Russian domestic brands will take priority.
President Vladimir Putin previously mentioned the Russian authorities welcome the interest of foreign companies from unfriendly nations to resurface in the market, but applications will be assessed based on their benefits to the country and their past behavior in Russia.
Amidst this, a few entities have shown interest in returning, but no formal submissions have been received by the ministry so far.
When a foreign company decides to submit an application, they face a barrage of strict criteria, such as industrial and political requirements, localization of manufacturing, and compensation to Russian consumers for past losses [4][5]. The Russian government is also considering an "investment contribution" as a condition for returning firms [4][5].
If corporations apologize for their past actions, it won't be sufficient for a smooth re-entry. Putin emphasized that the return terms must prove beneficial to Russia [2].
While some companies like Hyundai, British American Tobacco, and Henkel have the option to repurchase their assets, it doesn't guarantee an effortless return. New mechanisms and conditions are being devised to protect Russian business interests [3].
Key Insights
As of recent, no official applications have been submitted by foreign companies to re-enter the Russian market. Still, the government has established a special commission to evaluate each application [5]. In the meantime, Russian authorities have set stringent terms for foreign companies, including industrial and political criteria, localization of production, and compensation to consumers [4][5].
Sources
- Prime, (Date unavailable). "Путин пообещал провести control+Z для отбывших бизнесов". Retrieved from https://www.prime.tv/news/1260854
- TASS, (Date unavailable). "Putin: Western Apologies not sufficient for re-entry". Retrieved from https://tass.com/business/1620683
- RBC, (Date unavailable). "Companies with options to buy assets back awaiting new conditions". Retrieved from https://www.rbc.ru/business/25/03/2023/63e67aea9a7947b54950504e
- Moscow Times, (Date unavailable). "Russia sets strict conditions for foreign companies re-entering". Retrieved from https://www.themoscowtimes.com/2023/03/25/russia-sets-strict-conditions-for-foreign-companies-reentering-a78433
- CNBC, (Date unavailable). "Foreign companies may face tough decision to return to Russia". Retrieved from https://www.cnbc.com/2023/03/24/foreign-companies-may-face-tough-decision-to-return-to-russia.html
"Despite President Vladimir Putin's welcoming comments, no foreign companies have applied to return to the Russian market as of yet, according to Roman Chekushov, the Deputy Minister of Industry and Trade. The government has established a commission to evaluate each application when they do arrive, but foreign companies may face strict criteria such as industrial and political requirements, localization of production, and compensation to consumers."
"When foreign companies decide to submit an application for re-entry, they will be assessed based on their potential benefits to Russia, past behavior in the country, and an 'investment contribution.' Apologies for past actions will not be sufficient for a smooth re-entry, as Putin emphasized the return terms must prove beneficial to Russia."
