War in Ukraine: US condemns reports Russia may seize firms’ assets

War in Ukraine: US condemns reports Russia may seize firms’ assets

The United States has condemned reports that Moscow may seize the assets of businesses which have stopped operating in Russia over the invasion of Ukraine.

White House press secretary Jen Psaki warned that such a move will result in “more economic pain”.

Her comments come as the US Congress passed a spending bill which includes almost $14bn (£10.7bn) of emergency aid for Ukraine.

President Biden is expected to announce new measures against Russia on Friday.

Russia seizing the assets of foreign companies would be a “lawless decision,” Ms Psaki said on Twitter.

“It will compound the clear message to the global business community that Russia is not a safe place to invest and do business,” she added.

In light of the reports, global corporations that are cutting business ties or have halted operations in Russia told the BBC that they currently do not intend to change their plans.

“We have had no indications from Russian authorities that they intend to nationalize our assets,” a spokesperson for Coca-Cola said.

BP, which announced that it will offload its stake in Russian state-owned oil firm Rosneft, said its “position is unchanged”.

“We have decided to exit our shareholding in Rosneft and our businesses with Rosneft in Russia, and we are pursuing that. There isn’t a change or an update on this,” a spokesperson said.

In Washington on Thursday, the US Congress passed a $1.5tn spending bill, which includes almost $14bn in emergency aid for Ukraine.

The bill is expected to be signed into law by President Biden before government funding is due to run out on Friday night.

Also on Friday, the US, along with the Group of Seven (G7) and the European Union, is expected to move to remove Russia’s “most favoured nation” trading status over its invasion of Ukraine.

Revoking the preferential trading status would mean that the US and its allies would be able to impose tariffs on Russia, which would further isolate its economy.

The G7 is made up of the US, UK, Japan, Germany, France, Italy and Canada.

‘Pushed to a corner’

Pushan Dutt, a professor of economics and political science at the INSEAD business school, believes Russia underestimated the global response to the war.

The country has been “pushed to a corner”, he said, as it underestimated the pushback from Ukrainians, the resulting international sanctions, and the “will of NATO and the US to carry a full-fledged economic warfare”.

“I suspect they will go ahead and nationalise these assets, because their economy is under heavy pressure,” Professor Dutt told the BBC.

“If all these factories shut down and start laying off workers, then they face internal pressures at home as well. The only way to maintain support internally is to make it an ‘us versus them’, Russia versus the rest of the world kind of picture,” he said.

Source | BBC news

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