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(Reuters) – Russia has confiscated assets worth 3.9 trillion roubles, or around $50 billion at current exchange rates, over the past three years, underscoring the scale of the transformation into a “fortress Russia” economic model, the Kommersant newspaper said.
Foreign companies have grappled with the risk of state seizure since Russia sent troops into Ukraine in February 2022, but Moscow, citing strategic stability and domestic security, has increasingly turned its attention to domestic assets too.
The size of the asset seizures, calculated by the NSP Law Firm, shows the extent of Russia’s move from a relatively open economy towards a “fortress” model, Kommersant, one of Russia’s most respected newspapers, said.
The law firm advised business owners to shed potential weak points which could be used as a basis to seize assets including second passports or economic ties with countries which Russia classifies as “unfriendly” – broadly the entire Western world, Kommersant said.
It also suggested owners should consider entering into business with state-owned partners, Kommersant said.
About 1.54 trillion roubles worth of assets have been seized under the law on strategic companies, 1.07 trillion roubles worth seized on corruption grounds, 385 billion roubles on alleged privatisation violations and 621.5 billion roubles due to claims of ineffective management, Kommersant said.
The 1991 fall of the Soviet Union ushered in hopes that Russia could transform into an open free-market economy integrated into the global economy, though vast corruption, economic turmoil and crime undermined confidence in democratic capitalism in the 1990s. President Vladimir Putin in his first eight years in power supported economic freedoms, targeted some so-called oligarchs and presided over significant economic growth, seeing the economy grow to $1.8 trillion in 2008 from $200 billion in 1999.
In the 2008 to 2022 period, the economy grew to $2.3 trillion, though Western sanctions hit it hard after Russia annexed Crimea in 2014, according to figures from the International Monetary Fund.
Though the Russian economy has performed better than expected during the war in Ukraine, its nominal dollar size in 2024 was just $2.2 trillion, according to IMF figures.
Reporting by Guy Faulconbridge, editing by Louise Heavens
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