Moscow: Russia has placed more assets linked to European companies under temporary management, expanding its measures against foreign businesses as European Union leaders meet in Brussels to discuss support for Ukraine and European security.
A decree signed by Russian President Vladimir Putin on October 15 adds specified business assets to Russia's existing temporary management system. The measure affects businesses linked to France, Germany, Sweden and the Netherlands.
The companies identified in the reports include French flooring manufacturer Tarkett, German packaging company Menshen, Sweden linked business Sverige International Holdings and packaging group Sonoco. The measures concern specified assets and ownership interests in Russia, rather than the companies' entire international operations.
Russian business reports identified assets associated with Russian entities linked to Tarkett, Menshen, Ontex and Eviosys, as well as shares in Kappa Rus. The decree names Centre Capital as the management company responsible for the affected assets.
The legal details are important because the decision does not automatically mean that Russia has taken control of every operation owned by the international parent companies. The measures apply to the specific Russian assets and ownership interests covered by the decree.
The latest decision follows a series of similar measures introduced by Moscow in recent years. Russia has increasingly used temporary management arrangements to exercise control over assets connected to foreign businesses as relations with Western countries have deteriorated following the war in Ukraine.
The decree, identified as Presidential Decree No. 738, amends the existing framework established under an earlier decree issued on April 25, 2023. Under this system, the Russian authorities can transfer control of specified assets to an appointed manager.
Although the arrangement is described as temporary, foreign shareholders may lose practical control over the affected assets while the measures remain in force. The exact legal consequences depend on the ownership interests and businesses covered by the decree.
The move comes as European leaders gather in Brussels for a European Council meeting on October 15 and 16. Discussions include continued support for Ukraine, European defence and security, and preparations to protect critical infrastructure ahead of winter.
Ukrainian President Volodymyr Zelenskyy was expected to participate in discussions on October 16. The timing gives the Russian decision added diplomatic significance, although there is no confirmed evidence that the decree was issued specifically to influence his appearance at the summit.
The decision also comes amid wider disagreements over frozen Russian assets held in Europe. European governments have been debating how these assets should be handled as they consider further support for Ukraine and respond to the continuing conflict.
German Chancellor Friedrich Merz recently opposed a reported United States proposal to unfreeze some Russian sovereign assets held in Europe and transfer them to a financial arrangement overseen by Washington as part of efforts to revive peace talks. Merz argued that the assets should remain frozen in Europe and that European governments should determine their future.
The dispute over frozen Russian sovereign assets is separate from the latest Russian measures against foreign linked businesses. However, both issues highlight the growing economic and legal tensions surrounding the war and its financial consequences for Russia and Western countries.
Russia has previously defended similar temporary management measures by referring to actions by Western governments and companies that it considers unfriendly. Russian officials have also linked earlier decisions to the conflict with Ukraine and attacks on Russian economic infrastructure. These explanations concern previous measures and should not automatically be treated as a specific justification for the latest decree.
In September, Russia introduced similar measures affecting assets associated with several Western businesses, including Nestlé and Auchan. Other foreign companies have also faced changes to the management of their Russian operations as international businesses have reconsidered their presence in the country.
The expanding measures have raised concerns about the security of foreign investments in Russia and the ability of international companies to retain control of their local operations. Businesses operating in the country face additional uncertainty as political tensions, sanctions and changes in regulations continue to affect their decisions.
The full financial impact of the October 15 decree remains unclear. The available information does not establish the total value of the affected assets or whether the decision will lead to changes in factory operations, employment or supply arrangements.
It is also unclear what steps the affected companies will take in response or whether they will challenge the measures. Their responses and the precise legal implications will be important in determining the consequences for their Russian businesses.
The latest decision adds to tensions between Russia and European countries over the war in Ukraine. As EU leaders discuss future support for Kyiv, Moscow's expanding control over assets linked to foreign businesses presents another challenge for an already strained economic relationship.