Russian Lawmakers approved a bill on Tuesday, allowing Moscow to introduce control over foreign companies’ assets in Russia if their owners have ceased activities in the country “for no apparent economic reasons”, raising the stakes for multinationals trying to exit. The legislation passed in the first reading in the Russian State Duma.

The bill applies to companies in which foreign equities account for 25% or more if they are of ‘major’ significance for the Russian economy. They could be the only supplier of ‘critically important industries’, produce goods of prime necessity, or be a local economic mainstay.

A court would be able to impose external control over a company’s assets for a number of reasons, including supply-side shocks, key supply chain breaches, as well as job slashing and “actions or inaction” that could lead to casualties or technogenic disasters.

The law to seize the property of foreign investors follows an exodus of western companies, such as Starbucks, McDonald's and brewer AB InBev, and increases pressure on those still there.

The bill also says that external control could be imposed by a court for a period of up to 18 months. The measure could then be lifted before the scheduled date if shareholders that together own more than 50% of the stock file a request with the Russian authorities and remove the causes that led to the court decision.

The bill states that external management would not mean full nationalization. Foreign owners would have the opportunity to get their assets back and resume operations in Russia, or sell their shares.

Italian lender UniCredit, Austrian bank Raiffeisen (RBIV.VI), the world's biggest furniture brand, IKEA, fast food chain Burger King, and hundreds of smaller firms still have businesses in Russia.

IKEA, which had paused all operations in Russia, said it was closely following the development. Raiffeisen, said it was assessing all options, including a carefully managed exit.

-Reuters/RT