Putin has stolen their business, but now they want them back

Vladimir Putin has done something that at first sight seems completely out of character.

The Russian president signed a decree last year that the seizure of the Russian subsidiary of the Italian heating systems manufacturer Ariston. The order has transferred control over the company to Gazprom Household Systems, an arm of the state -owned Russian energy giant.

But on Wednesday, Putin signed another presidential decree to turn this decision and bring the ownership of the company back to the Italians.

Paolo Merloni, the executive chairman of Ariston Group, said: “We plan to resume activities with our Russian local leadership, to keep it fully on existing sanctions and to continue our legacy in the country.”

At first glance, it seems that a door opens for Western companies to get assets back through the Kremlin after Russian troops had been cast over the Ukrainian border in 2022.

Western companies have suffered $ 167 billion (£ 129 billion) in Russia since Putin launched its full scale of the full scale, according to the analysis of the KYIV School of Economics (KSE) Institute.

Sanctions on trade led to a wave of company outputs, while multinationals had also seized their assets and arrested the staff. Many others are forced to sell with 80 -PC discounts.

Putin’s tactics have caused a wave of company fights and legal claims because companies try to get their money back. Until recently, there seemed to be little hope of companies that managed to get something from Russia.

Now the chances of returning to Russia, however, has risen – if not the extraction of the correct payment for stolen assets – with Donald Trump in the White House and new messages from American officials about reopening economic ties with Russia.

Kirill Dmitriev, the head of the Russian direct investment fund, said last month that he expected: “A number of American companies will return to the Russian market in the second quarter of the year”.

Some Western companies have already laid the foundation to return.

The French car manufacturer Renault sold all its shares in Renault Russia and his 67.69pc interest in the Russian Avtovaz in May 2022, but this agreement contains an option for Renault to buy back his interest in Avtovaz who has been practicing for six years.

Luca de Meo, the Renault Chief, refused to exclude a return to Russia last month. However, officials have since said that the car manufacturer would have to pay $ 1.3 billion to do this.

Managers must also be wary: analysts warn that Putin Western companies is using as a pawn in his games with Europe and the US. Lost Western assets and cash have become a negotiation ship in negotiations on a potential peace agreement for Ukraine – and a way to distribute Europe.

“As the sanctions have produced, the Kremlin has increasingly taken the position that Russian assets of multinational companies are a useful collateral for frozen assets abroad,” says Ian Massey at S-RM consultants.

Europe and the US have frozen around $ 300 billion in Russia’s overseas assets, something that the Kremlin has irritated. Raiffeisen Bank International (RBI) from Austria is fighting a fine of € 2 billion (£ 1.7 billion) imposed by a Russian court in January, of which civil servants said it was compensation for frozen assets in Austria.

“We only had 10 minutes to make our case in court,” says RBI spokesperson Christof Danz. The suspect was flanked by armed people who wore Balaclavas. RBI appeals to the decision and has his next hearing on 24 April.

“The presence of Western companies in Russia and the type of leverage that gives [Putin] Certain European countries has been one of the most useful tools in the toolbox of the Kremlin for years, ”says Patrick Sewell, who runs consultancy control risks and supervises Russia.

With Ariston’s decision, Putin can also try to distribute Europe by indicating that countries that take a softer line to Moscow can get their assets back, he says.

“I think it is quite plausible that Putin would like to allow certain Western companies to take back their assets in a way that floats a wedge between different members of the EU.

“Italy has sometimes been a kind of soft target for Russia. They have usually been one of the more Russian -friendly EU files, Italian business has always been very active in Moscow.”

Putin’s reaction to the tidal wave of Western sanctions that Russia found after the war began was a vicious attack on foreign companies that are active in the state. Of the $ 167 billion lost since 2022, $ 57 billion has been lost by 30 companies that have seized their assets, according to the KSE Institute.

These include the French yogurt maker Danone and Danish brewer Carlsberg, who have since sold their Russian assets and have reduced their losses.

Putin also imposed blocks on companies that tried to escape. Until last fall, companies that sell assets in Russia had to pay a 50 st hit on the selling price and pay an exit tax on the proceeds of 15 pcs. In October, Russia increased the discount to 60 pcs and the EXIT allowance to 35 percent.

Transactions are also subject to a long -term approval process in which the Ministry of Finance is involved. It can take 12 months and is often not successful. In other words, many companies are effectively held in ransom.

Western companies are fighting back. The case of Ariston was supported by large lobbying from the Italian Ministry of Foreign Affairs. More companies try to attack through the legal system.

The German oil and gas producer Wintershall DEA has started two arbitration procedures against the Russian Federation after Putin had signed the decisions that the company had started from all his five Russian joint ventures, including in the Nord Stream Pipeline.

In February 2024, the Finnish energy company Fortum started in a similar way to Russia for a compensation for illegal seizure after it had seized its assets by the presidential decision in 2023.

“Fortum has since lost all supervision and control of the assets, and we are not aware of who this assets run, nor do we have other information about the assets,” says ESA Hyvärinen, at Fortum.

These tactics can be legally successful. In June 2024, German energy company Uniper won an arbitration of $ 14 billion arbitration against the Russian state-owned companies Energi-Gigantic Gazprom. But there is a big difference between winning a judgment of a court and enforcing.

“It looks good, it sounds good, but in the practice of that nature in the current environment are probably more symbolic in nature,” says Massey. “Enforcement and recovery are very challenging exercises in hostile circumstances.”

If Western companies cannot be paid for companies they have lost, would return to Russia to be a feasible option?

There are still $ 194 billion in foreign assets in Russia, and Trump has suggested that he will give companies the green light to resume the activities there.

Marco Rubio, the American Foreign Minister, said in February that there can be “incredible opportunities” for American cases in Russia.

“All the way to the Donald Trump election, companies were in line to get approvals [to exit Russia]”Says Alan Kartashkin, who previously led the office in Moscow of the Devoise & Plimpton law firm and is now supervising his Eastern European company.

“So much has changed. Now you have an American president who says we have to develop economic ties with Russia and take knowledge. No leader in the Western world has been said since then [Putin’s invasion of Ukraine in] February 2022. “

Hedge funds investigate how they can make investments in the Russian stock market, he adds. “They want to place a bet on a potential peace agreement.”

Sewell says that other companies are looking at the feasibility of selling non-geshanctioned goods, such as food, again in Russia.

Only three years after losing billions in Russia, western companies are considering going back.

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