Moscow Expands Asset Grab Against Western Companies – Why It Could Backfire

Russian President Vladimir Putin has broadened Moscow's campaign to seize assets belonging to Western companies, taking control of the Russian operations of Nestlé, Auchan, Lemana Pro, and FM Logistic. These businesses have been transferred to L.E.V. Management, a Russian entity created in late 2025 and led by a general from the Russian Interior Ministry.

Nestlé expressed its commitment to safeguarding its rights and business continuity but acknowledged the need to assess the situation and available options. The Kremlin justified the move by labeling the targeted companies as operating in "unfriendly countries," tying the action to European sanctions and support for Ukraine. Kremlin spokesman Dmitry Peskov referred to the measure as "temporary administration."

Previous instances suggest that this could potentially lead to Western owners permanently relinquishing control over their businesses. Established in 2023, following Western sanctions imposed in response to Russia's invasion of Ukraine, the mechanism has given Russian authorities significant control over foreign businesses. Facing a choice between retaining their assets and enduring seizure under Kremlin-imposed conditions, or exiting Russia under imposed terms, foreign firms have encountered challenges in managing their operations in the region.

Companies have been compelled to sell assets at discounted prices, while Russian authorities have tightened conditions for withdrawal. The seizures are an integral part of a more extensive expansion of state control since Russia's invasion of Ukraine. Approximately $50 billion in assets were confiscated between 2022 and 2025 as Moscow pursued a "fortress Russia" economic model.

The campaign has impacted both foreign and Russian-owned businesses. For the Kremlin, the primary benefit is gaining control over valuable assets. However, the seizures serve as a warning to investors that ownership in Russia can be overridden by presidential decree, a risk that may persist beyond the sanctions. Over 1,000 foreign companies have already departed Russia since the full-scale invasion, either selling, abandoning, or transferring their businesses.

Even prior to the latest seizures, Moscow's "temporary management" system was complicating prospects for Western companies considering a return. Foreign investment brings more than monetary value; it also entails technology, industrial equipment, management expertise, and access to global supply chains, all of which are increasingly constrained by sanctions imposed due to the conflict with Ukraine.

Each new seizure deepens a problem that may prove challenging for Moscow to rectify: investor confidence. While Russia can substitute Western brands with domestic or Chinese alternatives, restoring trust in property rights proves more difficult. Possessing an asset within Russia does not guarantee that the dispute will remain confined within its borders.

Pursuing compensation through international arbitration and foreign courts, when jurisdiction permits, remains a possibility for affected companies. Having witnessed similar cases with Nestlé, Danone, Carlsberg, and Fortum, companies contemplating investments in Russia now face a daunting reality: their investments may become hostage to the Kremlin's ongoing confrontation with the West.

By utilizing Western assets to undermine Ukraine's allies, Russia has tarnished its business environment, making recovery a formidable task even after the war concludes.