At least 47 multinationals operating in Russia, including gas giant BP and aviation giant Boeing, are at risk of having key assets confiscated by the Russian government.
Russia’s invasion of Ukraine in February prompted dozens of major international companies to pull out of the country amid sweeping sanctions imposed by the United States and its allies.
A report to be released next week by Russian watchdog Moral Rating Agency says the Kremlin may soon seize or redirect the assets of these companies to a friendlier business.
Other companies at risk include Shell, Samsung, PepsiCo, Nissan, Intel, Microsoft, Toyota and Ford. In total, the 47 companies at risk of losing assets to Russia represent 24% of the world’s 200 largest companies, according to the Moral Rating Agency.
The agency’s founder, Mark Dixon, said in a statement that the organizations anticipate “a tsunami of expropriations or blackmailed concessions over the next two months,” potentially affecting the U.S. stock market, which recently plunged into bearish territory.
“Even companies with a combination of risky assets and non-asset related businesses can suffer in both business sectors as it will be difficult for companies to continue to trade with a country that illegally expropriates its factory or its assets,” Dixon said.
The report comes after Russia has already decided to seize the assets of some companies.
On July 1, Russian President Vladimir Putin signed a decree authorizing a new Russian company to take full control of the Sakhalin-2 oil and gas energy project in eastern Russia, according to Reuters. The gas project represents around 4% of the world’s liquefied natural gas.
Energy giant Royal Dutch Shell and Japanese companies Mitsui and Mitsubishi together owned just under 50% of Sakhalin Energy Investment, the outlet noted.
Moscow is also set to pass a law that will allow the Kremlin to seize the assets of other Western and international companies.
Russia has adapted to its new reality as a corporate pariah. In May, a Russian business owner – who bought 850 stores from McDonalds – launched a rebranded restaurant chain using his buildings.
The moral rating agency, which earlier this month called out companies for failing to withdraw their services from Russia, ranked all 47 companies in its next report with a threat level rating ranging from 1 to 10.
Topping the list is energy giant BP, which has a nearly 20% stake in Russian oil and gas company Rosneft. BP announced that it would end its stake in Rosneft shortly after the Russian invasion.
Snacks and drinks company PepsiCo, which has two factories in Moscow that account for about 5% of its total revenue, is also high on the list of threats. In March, PepsiCo announced that it was suspending sales of its drinks in Russia.
LG Electronics, which makes Android smartphones, is at medium threat risk, with a production plant in Moscow. Nestlé, known for its sweets and chocolate drinks, also poses a medium risk of Russia seizing a subsidiary that accounts for around 2% of its total turnover. Nestlé suspended sales of KitKat and Nesquik in Russia, while LG also halted shipments to the country.
Other big companies — Microsoft, Boeing, Toyota, Volkswagen, Walgreens Boots Alliance and Ford — face a low risk of the Kremlin seizing or redirecting a small portion of the assets the companies hold in Russia.
The moral rating agency said several companies made the right decision by pulling out early and selling their assets, including McDonalds, Alphabet (which owns Google), Amazon and Honda.
In his statement, Dixon said Putin was using the threat of expropriation or asset seizure as part of his plan to “follow his usual pattern of dividing the enemy.”
“In this case, he will seek to drive a wedge between the private and public sectors,” Dixon said. “He is aware that corporations are free to act independently of their governments and will often act selfishly if threatened.”
“He probably hopes big business will pressure governments not to act in a way that will cause them to lose their assets,” he added. “Putin is trying to throw a spade among the pigeons.”