Tokyo demands Moscow release seized Japan Tobacco assets

Japan Tobacco, a leading global tobacco company, has demanded the immediate release of its assets seized by Russian authorities, following a souring of diplomatic relations between the two nations. The Kremlin's seizure of the assets, ordered on Thursday, marks the latest punitive measure against a foreign firm under rules Moscow claims are retaliation for international sanctions.

Japan Tobacco, one of the world's largest tobacco companies, controls approximately 40% of the Russian cigarette market, according to media reports.

Japanese officials, including government spokesman Minoru Kihara and the ambassador of Japan to Russia, lodged a protest with Russian authorities along with a delegation of senior officials from Tokyo, demanding the immediate withdrawal of the measure. The Japanese government spokesman emphasized that Japan Tobacco, along with the firm's manufacturing subsidiaries, had been placed under temporary control by Russian officials.

The seized assets belong to four of Japan Tobacco's manufacturing subsidiaries, and the company is currently assessing potential actions. Japan Tobacco affirmed that it has continued its business operations in Russia, adhering to all domestic and international sanctions and regulations.

President Vladimir Putin issued a decree on Thursday, stating that the assets would be taken into temporary administration, with control handed over to a Russian company called Industrial Assets. Japanese Minister for Economy, Trade and Industry, Ryosei Akazawa, stated that Tokyo had been on alert regarding the risk to Japanese interests in Russia. He further added that the officials who lodged the protest were on a business trip at the time of the seizure, aiming to safeguard Japanese companies' assets.

The seizure of Japan Tobacco's assets follows other recent actions by Russia against foreign entities, including the dismissal of Swiss food conglomerate Nestlé and French supermarket giant Auchan from their Russian operations. Since the full-scale invasion of Ukraine in February 2022, hundreds of foreign companies have either left Russia or opted to remain in the country. Russia has imposed stringent financial restrictions on companies from countries that have imposed sanctions on Moscow in response to the war.

In a separate incident, Ryosei Akazawa reported that Russian security service FSB arrested Japanese journalist Yuki Imai from the Hokkaido Shimbun newspaper last month on allegations of espionage activities on Russian territory. The Russian foreign ministry has also accused Japan of systematically using journalists for espionage operations within the country, a claim Japan has vehemently denied.