A New Wave of Nationalization in the rf: the kremlin Is Hogging Business for “Insiders”
3/27/2025
The kremlin-inspired redistribution of private property continues in russia. One can lose one’s business after a court decision to nationalize assets due to alleged “violations of the law” or simply sell it for pocket change to business partners of the russian authorities.
In 2024, at least 67 companies were nationalized in the rf with a total revenue of more than $9.6 billion and assets worth more than 6.4 billion rubles. In 2023, the total value of assets of nationalized companies amounted to about $5.7 billion. In 2022, the total value of assets of the nationalized enterprises was $3.3 billion.
The formal reasons for nationalization were most often violations of anti-corruption legislation, illegal privatization in the 1990s, violations of tax laws, and participation in extremist activities or in an extremist association. Decisions on nationalization of at least 43 companies were made by the court in a closed session.
The risk groups for whom the court may order the seizure of property include dual nationals; owners of offshore companies; russians living abroad but doing business in russia; entrepreneurs who have no ties at the federal level or contacts with the country’s top officials.
The rf has almost completed the process of seizing assets from foreign owners who have decided to leave the russian market. In addition to the fact that moscow sees such actions as an effective tool of influence on Western countries, the peculiarity of the robbery of foreigners is that the assets of such owners are bought by russian companies with the government commission’s permission to buy at reduced prices (15-35% of the market value). In 2024, the share of such transactions amounted to 25-30% of all merger and absorption agreements.
This year, the kremlin will continue to hog business from both its citizens and foreigners, hoping to fill the budget emptied by the war against Ukraine by $1.2 billion. This is the real reason for nationalization of assets in the rf.
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