President Putin signed a decree on “temporary transfer” of assets from German and Finnish companies.

The Russian authorities are beginning to seize assets from foreign companies that have failed to leave the country after the start of the war in Ukraine in February 2022. President Vladimir Putin issued a decree on 25 April 2023 that instructs Rossimushestvo, the federal property management agency, to take control of the shares and other properties which Uniper and Fortum held in their Russian subsidiaries. 

Uniper, a German energy company, thus lost a 83.73% stake in Unipro, a joint-stock company operating five water-powered electric stations in Russia, while Fortum, a Finnish energy company, lost 98.23% in five coal-powered electric stations in the Urals region and western Siberia.

The measure, according to the Russian leader, is a “mirror response” to Western seizures and restrictions to use Russian properties abroad. Both Uniper and Fortum announced last year they were leaving the Russian Federation and tried to sell off their assets there.

The German investor, which until the war had participated in the North Stream 2 project, in fact found a buyer but the Kremlin blocked the transaction.

A Uniper manager said Putin personally decided to make the exit difficult as the German directors were quitting from Unipro to avoid sanctions.

Fortum was still looking for a buyer.

The decree reads that neither of the two companies will be expropriated and will continue to exert legal ownership without participating in the decision-making process. Rossimushertvo will ensure that their assets remain safe and operational until they return.

Unipro and Fortum Russia are the largest joint ventures with Western capital in Russia’s energy sector. Unipro’s energy production in 2022 amounted to 11.28 GWt and Fortum’s 53.96 GWt, according to official reports. The profits were put at 21.3 billion rubles (260 million USD) and 12.5 billion rubles (150 million USD), respectively, says RBK, a business news outlet. 

Russia’s central bank estimates that in 2022 foreign capital withdrawal accounted for at least 217 billion US dollars, almost three-fold faster than in the precedent year.

Last year, Gazprom and Rosneft – two of Russia’s largest gas and oil corporations – had their assets worth around 22 billion dollars frozen by the governments in Germany and Poland alone.