After almost two weeks of armed conflict in Ukraine, Russia is accumulating sanctions from the West and seeing a stampede of companies. The invasion of the neighboring country promoted by Russian President Vladimir Putin, motivated dozens of companies to announce their departure from Russia, withdrawing investments in more severe cases, or at least suspending or limiting operations.
The list of companies that somehow cut business in Russia exceeds eighty companies from various sectors and includes giants such as Shell, Google, Apple and Volkswagen.
Lawyer Marcelo Godke, a specialist in business law, professor at Insper and FAAP, points out that not all decisions can be seen as private sanctions against Russia. There are indeed internal pressures, from consumers and investors that push companies towards this type of movement, but there are still other factors, such as compliance with the announced economic sanctions, the breakdown of supply chains, insecurity or operational infeasibility and the risk of punishment in as a result of the activities performed.
“Companies will have difficulties in making money circulate in and out of Russia, even those that are not in the financial sector. For example, they may not be able to make payments to employees who are in Russia and will have to abandon the operation there” , assesses Godke.
“Other companies simply want to disassociate their image from the image of Russia or avoid punishment”, he says, indicating yet another motivator for interruptions of activities: recent regulations approved in Russia with the provision of penalties for the dissemination of fake news and that could be used against actors like Facebook, Twitter, TikTok and their users.
“Companies that somehow work with the dissemination of news, posts, media companies will also stop their activities because of the attempt at censorship”, completes the specialist. The law also led to the suspension of the work of journalists from broadcasters, including BBC, CNN and Bloomberg.
Top announcements since the Russian invasion
Announcements made by oil giants are particularly noteworthy, as Russia is one of the largest producers and has one of the world’s largest reserves of oil and natural gas.
Energy group BP (British Petroleum) has announced that it will divest its nearly 20% stake in Russian state oil company Rosneft, ending a more than 30-year run. The British company also stated that it must give up other businesses in the country. Shell also announced that it will cease operations in Russia, leaving its 27.5% stake in a gas deal with Gazprom. The North American ExxonMobil and the Norwegian Equinor announced the beginning of the withdrawal of their investments.
Godke believes that divestments and the end of partnerships may have been motivated by the risk that Russia will become a pariah in the international market. “There is a chance that the oil industry itself will suffer a very big blow. This can happen anywhere, even with the largest reserves in the world”, he evaluates.
Another highlight made by the specialist is the restrictions on the transit of computers, equipment and technology to the country. Major companies such as Samsung, Accenture and Apple announced that they would stop selling all their products to Russia. Microsoft extended the outage to services as well.
“When this happens, we see a very fast scrapping, even more so today, that technology is in everything. If the technology does not arrive, we will see a scrapping of the industrial base, of the service base, which can occur very quickly in Russia , with losses even for the population”, he emphasizes.
Business has also been limited by companies such as Google, which has stopped selling ads in the country and has limited traffic updates on Google Maps to avoid risks to the safety of civilians in Ukraine. Other platforms, such as Twitter and Youtube, applied restrictions on the dissemination of the official channels of the Russian authority. Entertainment companies Disney and Warner will not screen their releases in Russian cinemas; Netflix suspended the streaming service and announced the interruption of local productions.
Payment operators Visa and Mastercard initially blocked transactions for Russian financial institutions, but advanced restrictions and suspended transactions with cards issued by Russian banks. American Express also suspended operations.
Remittances to the country were also at least partially halted. All shipping of containers to Russia by Maersk is stopped and MSC has also suspended shipments. Companies like Fedex and UPS are not delivering to Russia or Ukraine as a security measure to minimize risks to their employees.
There were several decisions by car makers that announced the temporary closure of their Russian factories (as, for example, Renault, Ford and Toyota) or the interruption of shipments to the country (such as GM and Scania). Luxury brands such as Louis Vuitton, Chanel, Prada and Gucci have temporarily lowered their doors, citing difficulties in serving the Russian market amid the conflict.
Aviation companies such as Airbus and the Brazilian Embraer suspended their technical support and maintenance activities on the aircraft. Boeing suspended these services and closed its Moscow office. Three North American symbols also suspended their commercial activities: McDonald’s, Starbucks and Coca-Cola.
Which companies cut business with Russia
The list of companies that have decided to abandon business in Russia, temporarily suspend activities or restrict operations and services provided in the country is growing and affects several economic segments, from the energy sector to bigtechs, retailers and food. Check out:
Oil, gas and energy
- BP (British Petroleum)
- shell
- galp
- ExxonMobil
- Equinor
- TotalEnergies
- orsted
Technology
- apple
- Samsung
- accentuate
- Microsoft
- dell
- HP
- Meta (owner of Facebook, Instagram and WhatsApp)
- Youtube
- Ericson
- Nokia
Automotive industry
- Volkswagen
- Ford
- General Motors
- Renault
- scania
- Toyota
- BMW
- Jaguar Land Rover
- Daimler Truck
- Nokian Tires
- Aston Martin
- Rolls-Royce
- Volvo Cars
- Volvo Trucks
- Harley-Davidson
Aviation
- Boeing
- airbus
- bombardier
- Embraer
- AerCap Holdings
- BOC Aviation
Logistics
- Maersk
- MSC
- ONE (Ocean Network Express)
- Hapag Lloyd
- UPS
- FedEx
- DHL
retail and clothing
- Zara
- H&M
- Ikea
- Hermes
- Burberry
- Chanel
- prada
- Cartier (through holder, Richemont)
- Gucci (through owner, Kering)
- Louis Vuitton (through owner, LVMH)
- Nike
- adidas
- Puma
Financial system and payments
- Visa
- MasterCard
- paypal
- American Express
- HSBC
Food
- McDonalds
- Starbucks
- Coke
- Pepsi
- Yogurt
entertainment and games
- disney
- Netflix
- WarnerMedia
- Sony
- Spotify
- Activision Blizzard
- Epic Games
- EA Games
- CD Project Red
Others
- Airbnb
- sandvik
- McKinsey
- Uefa (Union of European Football Associations)
- WEG
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