Russia’s President Vladimir Putin.
LUDOVIC MARIN/AFP via Getty Images
Western firms have $18 billion in Russia profits they can’t access, due to hurdles raised by the Kremlin, the FT reported.
BP, Citigroup and PepsiCo are among the affected, as they continued to operate in Russia following the Ukraine invasion.
“Tens of billions in dollar terms are stuck in Russia,” one CEO told the FT. “And there is no way to get them out.”
Western businesses made $18 billion in profits last year in Russia, but the Kremlin has made it impossible for them to access the funds in retaliation against sanctions, according to the Financial Times.
Since Moscow ordered the invasion of Ukraine in early 2022, many international companies pulled out of Russia but some have chosen to continue to operate there – and these are now locked out of their own earnings. Among firms facing this predicament include BP and Citigroup, the FT reported.
Such companies earned gross revenue of $199 billion in Russia last year, the publication said, citing data from the Kyiv School of Economics.
As part of counter sanctions against the West, Russia has imposed a dividend payout ban on businesses from “unfriendly” countries, which included the US, UK and EU nations.
“Tens of billions in dollar terms are stuck in Russia,” one CEO told the FT. “And there is no way to get them out,” he added.
Other foreign companies with funds in Russia that they can’t access include PepsiCo and Philip Morris, which have $775 million and $718 million trapped in Russia, respectively, according to the publication.
Moscow is freezing the funds of Western businesses as the nation battles multiple economic headwinds spawned by the geopolitical fallout of the Ukraine war – from plunging exports to a tumbling ruble, and a brain drain.
Just last week, Russia’s central bank hiked interest rates again in an effort to tame inflation and support the plummeting local currency.