Special permit for sale: Putin further restricts Western entrepreneurs

Cryptocurrencies are banned in Russia.

Special permit for sale: Putin further restricts Western entrepreneurs

Cryptocurrencies are banned in Russia. In order to mitigate the consequences of the western sanctions, the Kremlin is apparently making a U-turn. In addition, fears of the exodus of foreign investors are driving Putin to extend a decree that limits their scope for action.

Western entrepreneurs still need a special permit from the government in Russia in order to be able to sell their shares in large companies. This particularly affects the banking and energy sectors. According to the Interfax news agency, a corresponding decree passed by Kremlin chief Vladimir Putin in August was extended by one year and will now only expire on December 31, 2023.

After Russia launched a war of aggression against Ukraine, the West imposed sanctions on Moscow. At the same time, many corporations and entrepreneurs are trying to reduce their business in Russia because of the increased risks. However, the Russian government put a stop to these efforts months ago and prohibited the sale of shares in strategically important sectors such as raw material extraction or the financial sector. Such sales are only possible with an exemption from the government. The regulation affects entrepreneurs from "unfriendly countries", i.e. countries that have introduced sanctions against Russia. With the regulation, the Kremlin wants to prevent a mass exodus of Western companies.

At the same time, the government has approved deals where foreign companies sell their factories to Russian state actors at prices well below the market price. For example, carmakers Renault and Nissan have sold their production facilities in Russia for the symbolic price of one ruble.

In order to mitigate the consequences of Western sanctions, Russia also wants to legalize cryptocurrencies in the coming year, according to information from the State Duma. "(The cryptocurrency) can be used well in international payment transactions," said the head of the finance committee in the Duma, Anatoly Aksakov, according to the daily newspaper "Kommersant". It is a question of legally securing their use in order to secure the "parallel import". The Russian authorities describe the import of goods without the express permission of the manufacturer as parallel import.

So far, the use of cryptocurrencies in Russia is prohibited. The central bank was very skeptical about the phenomenon for years. In September, however, Prime Minister Mikhail Mishustin indicated a change of heart. He announced that the competent authorities would agree on a uniform position by the end of the year. Western sanctions ban numerous products from entering Russia. In addition to armaments, these are mainly high-tech goods and components for the electronics industry such as semiconductor chips, but also machines and systems. Russia is trying to get some of these goods from third countries.