Russia's Asset Seizures: A New Stakes in the Grain Trade and Airport Grab

Russia's recent actions in seizing assets from foreign companies have raised the stakes in the global investment landscape, with significant implications for multinational corporations operating in the country. The seizure of grain trader United Grain Company and the Moscow Sheremetyevo International Airport has sent a clear message to foreign investors about the risks and uncertainties they face in Russia.

The takeover of United Grain Company, a major player in the grain market, has disrupted Ukraine's grain exports and further strained relations between Russia and the West. This targeted approach to asset seizures has increased uncertainty for investors, making it more difficult for them to predict which companies or sectors may be next. Moreover, the lack of compensation for seized assets and the transfer of assets to regime-friendly owners have raised concerns about the potential for corruption and further undermined the rule of law in Russia.

The seizure of the Moscow Sheremetyevo International Airport, a strategically important asset, has been seen as a response to Western sanctions and a means to assert control over a vital infrastructure. This action has raised fears among foreign investors about the safety of their investments in Russia and the potential for further seizures. The targeted nature of these asset seizures, combined with the lack of compensation and the breach of international law and investment treaties, has increased the risk for investors and businesses with interests in Russia.

Russia's actions have significantly increased the perceived investment risk in the country, leading to a decline in foreign direct investment (FDI) inflows and raising concerns about the safety of foreign investments. The World Bank's Ease of Doing Business Report 2020 ranked Russia 28th in the world for the ease of doing business, but the report did not include Russia in its 2021 and 2022 rankings due to concerns about data quality and the impact of sanctions. This decline in rankings reflects the growing perception of risk among foreign investors.

In conclusion, Russia's recent asset seizures, including the takeover of grain trader United Grain Company and the Moscow Sheremetyevo International Airport, have raised the stakes for foreign investors and businesses operating in the country. These actions have increased uncertainty, risk, and the likelihood of financial losses, making it more challenging for investors to protect their assets and avoid potential losses. As Russia continues to target foreign companies and assets, investors and businesses must carefully consider the risks and potential consequences of continuing operations in Russia, as the political and economic environment remains uncertain and volatile.