Companies from Europe and the G7 countries have not left Russia en masse
Just 8.5% of companies in the European Union and G7 countries have left Russia, according to a study by a Swiss university, which has questioned the “discourse of a massive exodus” of companies since the invasion of Ukraine.
Before the start of the conflict in February, 2,405 subsidiaries of 1,404 companies from the European Union and the G7 countries were active in Russia, identified Professors Simon Evenett from the University of St. Gallen and Niccolò Pisani from the IMD Lausanne, a renowned company administration institute.
By the end of November, nine months after the invasion of Ukraine, less than 9% of the panel surveyed had already sold at least one Russian subsidiary, and according to their work, the disposals were more likely to affect American companies than European or Japanese companies.
Several factors can explain why companies have not left Russia. For example, your activity must not be subject to the sanctions. Others may not want to opt out because of the “social” usefulness of their products, the study’s authors point out, using the example of essential medicines. Also, some may not have found a buyer at a sufficient price, while others, even if they have found a buyer, may encounter obstacles that the Russian government may have put in place to “hinder” or “delay” the assignment and do so prevent repatriation of sales proceeds.
But if the number of Western companies exiting “does not increase significantly” within the next year or two, “the willingness or ability of many Western companies to divest from jurisdictions that view their governments as geopolitical rivals” could be called into question judges will be appointed.
According to her research, 120 Western companies had left Russia by the end of November. Among those still active there, 19.5% are German, 12.4% American and 7% Japanese.