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Russia mulls seizing assets of companies suspending operations

The White House has said that Russia’s move will be met with further economic sanctions.

In a reprisal against western corporate entities that are suspending or leaving their Russian operations, the Kremlin said that it is considering seizing assets of these companies.

Furthermore, the Russian government has hinted that it will assess whether these western companies can function in Russia again once the present crisis is over. The Putin administration said that the government will take control of all such companies which have more than 25% foreign ownership.

In a reaction to this White House press secretary, Jen Psaki has warned that if Russia decides to make such a move, it will result in “more economic” pain.

In a tweet, she said, “Any lawless decision by Russia to seize the assets of these companies will ultimately result in even more economic pain for Russia. It will compound the clear message to the global business community that Russia is not a safe place to invest and do business.”

Cutting across industry segments, more than a hundred major companies of western origin have exited Russia. This in combination with a slew of war-like economic sanctions has spelled disaster for the Russian economy. The Russian stock market has suffered a bloodbath, the rouble has lost 30% of its value in less than three weeks.

Since Russia went on an invasion of Ukraine from three fronts, it has been subjected to multiple economic offensives by the US-led western nations including the UK, European Union nations, and Canada.

These include major trade sanctions, freezing of assets of Russia’s central bank in western countries. The US and UK have decided that they will also stop engaging in the energy business while European nations are yet to come up with such announcements. Currently, Russia provides 30% of all of Europe’s oil and gas.

Deplatforming of Russian major banks from the SWIFT– an international financial messaging service– have also hurt the capabilities of Russian merchants to do business with international counterparts.

Major banks including Wall Street-based JP Morgan and Goldman Sachs have winded up their business in the country.

Meanwhile, Russia along with its ally Belarus is touted to default on its sovereign debt. According to reports, Russia is set for repayment of $117 million next week in dollars. However, so far the Russian finance ministry has assured that the country will not fail to comply with its sovereign financial commitments.

According to the Guardian, Russia had last defaulted on international debts first in 1917 and later in 1998.

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