Russia drafts legal framework for return of Western firms, including local production and technology transfer requirements — Bloomberg

Russia’s Finance Ministry has prepared a set of preliminary proposals aimed at bringing Western companies back to the country, Bloomberg reports, citing two Russian officials. The proposals include requirements to localize part of the firms' production and agree to technology transfers intended to boost productivity.

Back in March, Vladimir Putin instructed the government to develop a procedure for approving the return of Western businesses that exited the country. According to Bloomberg, this was “the most concrete sign yet” that Moscow is preparing for sanctions to be lifted. Still, according to one Kremlin-linked source quoted by the agency, “no one is knocking on the door yet.”

Chris Weafer, head of the consulting firm Macro Advisory, predicted that most Western firms won’t consider returning until a lasting peace agreement is in place. “Nobody wants to come back too soon and then have to exit again,” he said.

Even in the event of a peace deal, Bloomberg writes, there would still be “formidable political and economic obstacles” to any return. Some companies’ assets have been sold to new owners, and thanks to parallel imports, Russians already have access to “everything from iPhones to Coca-Cola at about the same prices as elsewhere.”

The Financial Times also reports that there’s no indication any Western company is currently planning a return to Russia. The paper notes that the Italian firm Ariston marked the first case in which Moscow lifted external administration of a seized company without selling it. At the end of March, Putin revoked a decree that had handed Ariston’s Russian assets over to Gazprom Household Systems. According to FT sources, the decision followed “intense lobbying” by Italy’s foreign ministry, the Italian embassy in Moscow, and a prominent private individual.

A Western businessman who maintains regular contact with Russian officials told FT that the Russian government is trying to send a message: companies that wait too long might miss their chance. “They want to create a sense that it’s now or never,” he said.