Moscow’s asset seizures unnerve Japanese companies in Russia

Over 200 Japanese entities that remain active in Russia are bracing for uncertainty following the Russian government's seizure of assets belonging to three foreign corporations. The Kremlin transferred the assets of Swiss food company Nestlé, French retailer Auchan, and home improvement firm Lemana Pro to Russian entity LEV Management under a decree signed by President Vladimir Putin.

Kremlin spokesman Dmitry Peskov called the nations involved "unfriendly," citing their involvement in military actions against Russia or strikes by the Kyiv regime on civilian and economic infrastructure.

Approximately 230 Japanese-affiliated companies continue to operate in Russia, though many have ceased operations or halted new investments. More than three-quarters of these firms plan to maintain a presence in Russia for at least the next two years, according to a June survey by the Japan External Trade Organisation. Yakov Zinberg, a professor of international relations at Tokyo’s Kokushikan University, stated that Japanese companies will closely monitor the situation and express concern.

Japan-Russia relations have been tense since the beginning of the Ukraine war in 2022, with Japan joining other G7 nations in imposing sanctions. However, few Japanese firms have withdrawn from Russia, likely hoping for the war's swift conclusion.

Tensions between Moscow and Tokyo have intensified in recent months. Japanese House of Representatives speaker Eisuke Mori visited Kyiv this month to meet Ukrainian President Volodymyr Zelensky, who called Russia's invasion "a barbaric act that shakes the international order and the values that the international community has built over decades."

Putin recently visited disputed islands north of Hokkaido, prompting protests from Tokyo, and Russia subsequently unveiled a statue depicting a Soviet soldier crushing a border marker with the Japanese emperor's symbol. Russia may closely watch the UN General Assembly in New York this week for a potential meeting between Zelensky and Japanese Prime Minister Sanae Takaichi.

James Brown, an international-relations professor at Temple University’s Tokyo campus, said that agreeing to the meeting could lead to Russia targeting Japanese companies. Japan holds a 10% stake in Russia's Arctic LNG 2 project and a 30% stake in Sakhalin 1, north of Hokkaido.