No 'free exit' from Russia for Western firms: Kremlin

The Kremlin on Tuesday said there would be no “free exit” for Western companies selling their Russian assets and they would have to abide with strict rules dictated by Moscow. The Russian government has tightened restrictions on foreign companies trying to sell their Russian subsidiaries, placing de facto caps and deadlines on transactions, the Financial Times reported earlier on Tuesday, citing people involved in recent deals. Hundreds of Western companies have left Russia in the 20 months since Moscow launched its assault on Ukraine, with many taking steep discounts or writing-off assets entirely. “Russia remains a country that is open for foreign investment… Russia is ready to create comfortable conditions for foreign companies working here” Kremlin spokesman Dmitry Peskov said Tuesday. “But taking into account the quasi-war that the collective West is waging with Russia, including an economic war, a special regime applies to those Western companies that are leaving under pressure from their governments,” Peskov said. Moscow has imposed a raft of capital controls in response to Western sanctions that it says are needed to boost economic sovereignty. A special Russian government commission must approve all large-scale deals involving companies from countries it labels “unfriendly” – those that have hit Moscow with sanctions. President Vladimir Putin must personally approve deals in the sensitive energy and finance sectors and departing companies must sell at a mandatory 50 percent discount and pay an exit tax worth 15 percent of the company’s market value. “Of course, there can’t be any free exit at the moment,” Peskov said Tuesday. One investment banker told the FT Moscow had limited sales of foreign currency by companies leaving Russia to $20 million a day, and placed a seven-day deadline on deals – effectively capping proceeds at $140 million. Another said there was an informal limit of $400 million that could be transferred abroad. AFP could not verify the reports. Without commenting on the reported details, Peskov denied restrictions were aimed at supporting the highly volatile Russian ruble. Moscow has appeared to revel in the exit of Western companies since last February, with Russian firms and Kremlin-connected businessmen scooping up lucrative assets in cut-price deals.