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Russian prosecutor's office to investigate firms leaving country

by German Press Agency - DPA

Mar 11, 2022 - 7:06 pm GMT+3
A woman walks in front of Moscow's International Business Centre (Moskva City) complex in Moscow, Russia, March 11, 2022. (AFP Photo)
A woman walks in front of Moscow's International Business Centre (Moskva City) complex in Moscow, Russia, March 11, 2022. (AFP Photo)
by German Press Agency - DPA Mar 11, 2022 7:06 pm

Multinational firms that pause operations in Russia in order to protest Moscow's invasion of Ukraine will be pursued by the Russian prosecutor general's office.

Compliance with obligations to Russian workers and their rights will be examined, the authority said on Friday. In addition, every cessation of operations is to be checked for signs of intentional or sham insolvency.

Due to the Russian invasion of Ukraine, numerous international companies – suppliers of fashion articles and consumer goods, carmakers, banks and tech companies – have suspended their business. Many explicitly stated that Russian employees will continue to be paid.

Sony Music Group became the latest to add its name to the list on Friday, saying it had suspended its Russian operations and called for peace in Ukraine.

Moscow is threatening to expropriate the international companies that suspend their business in the country.

The Russian government is working on steps to initiate bankruptcy for such countries, followed by nationalization of the property, the deputy head of the Russian Security Council Dmitry Medvedev said on Thursday. New production would have to be built on "the basis of the assets left behind by investors in panic," he said.

President Vladimir Putin supported the proposal and called on his government to "act decisively" to prevent any damage to the Russian business partners of the companies. He said there were already "enough legal market instruments" for this.

In Washington, White House spokesperson Jen Psaki warned the Kremlin against expropriation. "Any lawless decision by Russia to seize the assets of these companies will ultimately result in even more economic pain for Russia," she tweeted.

"It will compound the clear message to the global business community that Russia is not a safe place to invest and do business," she claimed.

But leading German industrial bodies have warned of the consequences of sanctions against Russia's fossil fuel industry, amid international calls for Western countries to stop using Russian gas and oil.

"There is broad support in the German economy for the tough sanctions. Because war is no basis for business," the managing director of the Association of German Chambers of Industry and Commerce (DIHK), Martin Wansleben, told the Rheinische Post newspaper on Friday.

"The repercussions for the German economy in the coming months should not be underestimated," Wansleben said. "This applies not only to further increases in energy prices but especially to dislocations in supply chains with a broad impact in the economy," he warned.

"This economic situation should be taken into account by every politician in Europe," Wansleben urged.

The metal and electrical industry also warned of serious consequences if further sanctions came into play.

"If Germany were to decide to stop importing gas or oil from Russia, it would have a dramatic impact on our industry, but also on private households," President of the Gesamtmetall employers' association Stefan Wolf told the Frankfurter Allgemeine Zeitung newspaper.

"Inflation would be in double figures. Security of supply would be seriously threatened," he warned.

The chemical industry also pointed to the large consumption of oil and gas in its sector. If there were to be prolonged outages of plants due to an energy embargo, this would have massive consequences for the value chains in Germany, the German Chemical Industry Association (VCI) explained on Friday.

About 95% of all industrial products require chemical products, from cars to computer chips and insulation materials to televisions, medicines and detergents.

"If you cut off the energy and raw material supply for the chemical industry in the short term, you also paralyze the entire industrial production in Germany," Chief Executive Wolfgang Grosse Entrup told Deutsche Presse-Agentur (dpa).

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