Western countries should consider imposing sanctions against companies that continue to do business in Russia, thereby sponsoring Russian aggression against Ukraine.
Despite 19 months of full-scale Russian army invasion into Ukraine, a significant number of foreign investors continue to operate within the territory of the Russian Federation as of early October. Over 1,400 international companies are still supporting the Russian economy. While hundreds of Western firms initially pledged to leave the Russian market or reduce their operations at the beginning of the full-scale war, they continue to work and even increase their profits in the absence of competition. Among them are 'Leroy Merlin' (with a turnover of 529.7 billion rubles in Russia in 2022), JT Group (432.6 billion rubles), Philip Morris (399.9 billion rubles), PepsiCo (303.7 billion rubles), Elo Group (292.6 billion rubles), VEON (286.4 billion rubles), Metro AG (223.6 billion rubles), Mars (201.4 billion rubles), Nestle (195 billion rubles), and others.
Therefore, by remaining in Russia, foreign companies are financing a criminal war and undermining the effects of Western sanctions against Moscow. International companies pay taxes to the Russian state budget, which are used for the production of defense industry products in Russia. The combined annual revenue of these companies in Russia is nearly $290 billion, which is one-fifth of Russia's GDP.
PepsiCo increased its earnings in Russia in the first year of the full-scale invasion. In 2022, the revenue of 'PEPSICO HOLDINGS LLC' reached $2.59 billion (or 176.5 billion rubles), with a net profit growth of 333% to $525 million compared to 2021. Taxes totaling over $115 million (or 8.29 billion rubles) were paid to the Russian budget.
Another well-known company that continues to do business in Russia is Yves Rocher, with an annual turnover of approximately 3 billion euros. In 2022, 'Yves Rocher East' paid taxes of around $6 million to the Russian budget.
It is known that German pharmaceutical company Stada and the Fresenius group of companies, specializing in medical technology and healthcare, also continue to operate in Russia. In the past, they justified their work in Russia by the need to provide medical assistance to ordinary citizens.
At the same time, about 40% of international companies have decided to leave Russia or are in the process of exiting. As of September 18, 2023, 1,225 foreign companies have ceased their activities in Russia, and 275 of them have completed their withdrawal from the Russian market. This includes fast-food chains like McDonald's, coffee shop networks like Starbucks, automobile manufacturers like Groupe Renault, Volkswagen Group, Nissan, Mercedes-Benz, Swiss cosmetic company Wella, technology equipment producers like Bosch, Siemens, Electrolux, ride-sharing service Uber, and many others.
Today, the entire Russian economy operates exclusively for war. Over the past year, defense spending has increased by 40%, and national security spending has risen by 90%. By creating job opportunities, foreign companies relieve the Kremlin of the burden of unemployment payments and the associated social issues. Foreign companies are also being drawn into mobilization efforts in Russia. According to new Russian legislation, corporations operating in Russia are required to assist in the mobilization of employees into the army and finance their military equipment.
Thus, every Western company that continues to profit in Russia, through their taxes, supports Russia's aggression. In the context of war, the activities of corporations that continue to pay taxes in Russia are, at the very least, questionable. Therefore, the collective West, whose market is more of a priority for international companies than Russia, should take a strong stance, implementing all necessary measures against European firms that have not yet left the Russian market. In particular, the activities of such companies in the Russian market should become economically unfavorable for them."
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