Russia seizes control of 180 private companies for war needs

After Russia started its full-scale war against Ukraine, the Russian General Prosecutor's Office filed 40 lawsuits in favor of the state to confiscate over 180 companies. 

These findings effectively amount to the wartime nationalization of private property, according to "Novaya Gazeta. Europe" and "Transparency International – Russia," Rubryka reports.

Based on information about the lawsuits from "SPARK" — professional market analysis and company systems — and the database of court decisions, investigators found that the total assets of the companies the Russian General Prosecutor's Office wants to confiscate amount to about 1.04 trillion rubles.

Journalists say this is about 0.6% of Russia's GDP for 2023. Most of the lawsuits concerned defense industry enterprises, engineering, and food and fishing industries (seven lawsuits each). Six lawsuits were filed regarding ports, real estate, and construction companies. In one lawsuit, several legal entities were involved, which may belong to the same group of companies.

Over 20 lawsuits were satisfied in the first instance, according to calculations. Only in one case did the Russian General Prosecutor's Office withdraw the lawsuit and reach a settlement in another.

The most common reasons for confiscation were illegal ownership (in 20 cases) and violations of anti-corruption legislation (in 14 cases). In three cases, prosecutors sought to invalidate agreements or businesses, citing violations of Russian Federation laws. In another three cases, the reason was "financing of the Armed Forces of Ukraine." Some lawsuits, journalists note, have not been published or are classified.

"Novaya Gazeta Europe" and "Transparency International" report that the number of nationalization lawsuits sharply increased during the two years of full-scale war: there were almost none in the 2010s, and in 2020 and 2021, the General Prosecutor's Office filed only three lawsuits per year. At the same time, journalists observed a "wave" of lawsuits in 2023, which they called a record number of confiscations.

The Director of "Transparency International – Russia," Ilya Shumanov, points out one of the peculiarities of "military nationalization" that the Russian security service FSB has started to participate in the cases. Its materials and certificates appeared in several cases, although, according to him, the special service should not be involved in civil proceedings.

Background

In April 2023, Russian President Vladimir Putin signed a decree allowing the Russian authorities to take "temporary control" of the assets of foreign companies in Russia.

Among the first companies nationalized under this decree were Finnish Fortum, French Danone, and Danish Carlsberg.

On December 22, 2023, Putin signed a decree on transferring the "temporary management" of one of the largest Russian car dealerships, "Rolf."