Asset Seizures and Doing Business in Russia

And the disingenuosity of corporate heads who are continuing to do business inside Russia.

Nestlé is still doing business there.

Ukrainian Prime Minister Denys Shmyhal tweeted that he had talked with Nestlé Chief Executive Mark Schneider, who he said showed no understanding of the side effect of continuing to sell in Russia.

Shmyhal is being generous. Schneider, having risen to the top of a large international corporation, knows full well the fungibility of money; he knows full well that money his company spends in Russia, even if it’s solely to support his employees there and the employees of Russian suppliers of his businesses there, allows other moneys to be reallocated to Russia’s barbaric invasion of Ukraine. Schneider knows full well that the taxes his Russian-domiciled companies pay go to supporting the Russian war machine.

Other businesses have said they are staying because their hands are tied by joint-venture or franchise agreements.

This is…mistaken. The disruptions caused by war are a perfectly legitimate business—and legal—reason to walk away from “joint ventures,” especially when one of the partners is domiciled in the war-starting nation and thereby (however unavoidably) supporting that war of aggression. These business’ managers know this full well; they’re simply hiding behind a transparent fig leaf in order to put their incomes ahead of what’s right.

Russian prosecutors have warned some companies of asset seizures if they withdraw from the country and threatened to arrest employees.

This is simply idiotic. By surrendering their companies to such threats, the business managers who so succumb already have surrendered their company assets to Russian authorities. Koch Industries COO, Dave Robertson, for instance:

We will not walk away from our employees there or hand over these manufacturing facilities to the Russian government so it can operate and benefit from them[.]

He already has, and they already are—whatever Koch’s facilities produce in Russia, those facilities now are producing only that which the Russian government permits.

PepsiCo, Unilever, Proctor & Gamble, Reckitt Benckiser, these are another small part of the extensive list of Western companies finding excuses to continue doing business inside Russia and thereby, however indirectly, supporting that nation’s barbaric war.

Maybe Western consumers should begin looking to other companies from which to buy things.

Update: Since I wrote this, Nestlé has agreed to limit its production in Russia to truly necessary items: baby food and other infant nutrition products, specialist veterinary meals and medical-nutrition products. Nestlé also has committed to donating such profits as it gets in Russia would be donated to humanitarian relief organizations.

Leave a Reply

Your email address will not be published. Required fields are marked *