The corporate exodus from Russia since its 2022 invasion of Ukraine has cost foreign companies more than $107 billion in writedowns and lost revenue, a Reuters analysis of company filings and statements showed.
The volume of losses has increased by one-third since the last tally in August last year, underscoring the scale of the financial hit to the corporate world from Moscow's invasion, as well as highlighting the sudden loss of Western expertise from Russia's economy.
"As Russia's invasion continues amid faltering Western military aid, and the granularity of Western sanctions regimes increases, companies still aiming to exit Russia will likely face further difficulties and have to accept greater writedowns and losses," said Ian Massey, head of corporate intelligence, EMEA, at global risk consultancy S-RM.
Russian President Vladimir Putin, fresh from securing reelection in a landslide victory widely condemned in the West as unfair and undemocratic, now has a renewed mandate to pursue further isolation from the West, including through additional asset seizures and political pressure, Massey added.
Moscow demands discounts of at least 50% on foreign asset sales and has steadily tightened exit requirements, often accepting nominal fees as little as one rouble.
So far this year, sales of assets owned by Shell, HSBC, Polymetal International and Yandex NV have been announced, totaling nearly $10 billion and at discounts as high as 90%. Last week, Danone said it received regulatory approvals to dispose of its Russian assets, taking a total loss of $1.3 billion.
About 1,000 companies have exited, although hundreds of companies including French retailer Auchan and Benetton are still operating or have put business on hold there, according to analysis by Yale School of Management.
Russian retaliation
Western nations froze around $300 billion of the Bank of Russia's gold and foreign exchange reserves after Russia's invasion. Germany has nationalized Gazprom's Germania plant, renaming it Sefe, and placed Rosneft's Schwedt refinery under German trusteeship.
Russia has promised to retaliate against EU proposals to redistribute billions of euros in interest earned on its frozen assets, warning of catastrophic consequences and saying any attempt to take its capital or interest is "banditry."
Western banks, too, are concerned about the legal wranglings any confiscation may spawn.
"There are no Western assets in Russia that can be considered safe or ringfenced so long as the Kremlin continues to wage war," Massey said.
Moscow has already taken temporary control of assets owned by several Western companies including Fortum, Carlsberg, OMV and Uniper.
Russia's state RIA news agency calculated that the West stood to lose assets and investments worth at least $288 billion if Moscow were to retaliate.
It was based on data which it said showed that direct investment by the European Union, the G-7 nations, Australia and Switzerland in the Russian economy at the end of 2022 totaled $288 billion.
It said EU nations held $223.3 billion of the assets, of which $98.3 billion was formally held by Cyprus, $50.1 billion by the Netherlands and $17.3 billion by Germany.
Reuters could not verify the data cited by RIA.
But Moscow's hardline approach inflicts damage on Russia, too.
Lawyer Jeremy Zucker, a sanctions expert, said a surprisingly large number of his firm's clients across a wide range of industries had decided to exit Russia entirely and would likely be reluctant to return even after hostilities end.
As a result, meaningful technologies have left the country and Russia may no longer be able to support certain high-tech production, said Zucker, chair of U.S. law firm Dechert's national security practice.
"It certainly suggests to me a meaningful degree of injury to the economy," he told Reuters.
Key assets
A 2022 decree bans investors from "unfriendly" countries – those that have imposed sanctions on Russia over its actions in Ukraine – from selling shares in key energy projects and banks without explicit presidential approval.
Meanwhile, many producers of everyday staples and consumer goods have refrained from entirely leaving Russia, arguing that everyday people in Russia rely on their products.
Companies still operating or doing business in Russia include Mondelez International PepsiCo, Auchan, Nestle, Unilever, Reckitt and British American Tobacco. Others, including Intesa Sanpaolo, are facing bureaucratic hurdles as they try to leave.