Revised Legislation to Enhance Putins Control Over Former Foreign Companies Assets

Russian legislators have amended existing laws to grant President Vladimir Putin enhanced powers to prevent foreign firms from repurchasing assets they sold while exiting the Russian market, as reported by Interfax on Wednesday.

These modifications highlight Russia’s strategy to exclude Western businesses from key sectors and to reinforce domestic control over foreign-owned assets that were left behind following the invasion of Ukraine.

The revised legal framework enables Putin to determine the criteria under which foreign companies can be prohibited from reacquiring their former businesses, according to a source familiar with the legislative updates cited by Interfax.

Additionally, Russian courts will have the authority to annul existing buyback agreements upon request from current non-foreign asset holders, based on those established criteria.

This legislation is retroactively applicable to transactions conducted between February 22 and December 31, 2022, refining the original draft that aimed to restrict exits between February 24, 2022, and March 1, 2025.

The updated regulations seem to primarily target companies governed by federal health and safety standards, such as food producers, retailers, and restaurants, especially those not meeting inspection requirements.

The Financial Times previously reported that Putin was directly involved in crafting this legislation in response to demands from Russian business owners to prevent former Western partners from returning to the market.

Vkusno i Tochka, the Russian fast-food chain that assumed the operations of McDonald’s following its exit, reportedly advocated strongly for this initiative, according to FT.

In the wake of the full-scale invasion of Ukraine, numerous foreign businesses negotiated exit agreements that included buyback clauses, allowing them the option to reclaim their enterprises later.

Companies like McDonald’s and Renault were said to have secured such agreements.

In May, Putin publicly informed executives of Vkusno i Tochka that he requested the government to establish a mechanism to invalidate these buyback arrangements.

According to the Russian analytical agency AK&M, foreign companies completed 109 exits worth $16.3 billion in 2022, a figure that dropped to $11.1 billion in 2023 and $3.4 billion in 2024. The first quarter of 2025 recorded nine foreign exits totaling $420 million.