Russia Corporate Crackdown Raises Foreign Asset Risk

30 September 2026

Executive Summary

European companies with operations in Russia face increasing risk of losing operational control over their local businesses as Moscow widens its use of temporary state administration.

Russia has recently placed the local operations of major European businesses including Nestlé, Auchan and Metro under temporary administration.

Metro has confirmed that it no longer has operational control over its Russian subsidiary, although formal ownership remains with the German group.

The business operates 91 wholesale stores in Russia and employs approximately 9,000 people.

Reuters reports that since the war began, temporary administration has now been imposed on 135 businesses affiliated with foreign companies, the vast majority linked to European countries.

Russian officials have presented the measures partly as retaliation against European sanctions and support for Ukraine.

For multinational businesses, the risk has moved beyond sanctions affecting transactions to governments potentially affecting control of the underlying corporate asset itself.

UK Impact

UK businesses with direct or indirect exposure to Russia should review whether they retain:

• Subsidiaries.
• Joint ventures.
• Investments.
• Intellectual property.
• Receivables.
• Inventory.
• Distribution arrangements.
• Local bank accounts.
• Employees.
• Contractual counterparties.

Exposure can remain even where a company believes it has substantially reduced its Russian operations.

Global Impact

Temporary administration creates a different risk from conventional sanctions.

A foreign company may legally remain the owner of an asset while losing the ability to control:

• Management.
• Cash.
• Inventory.
• Employees.
• Procurement.
• Sales.
• Intellectual property.
• Corporate strategy.

Previous Russian temporary-administration cases have subsequently resulted in businesses being transferred or sold to Russian owners.

However, temporary administration itself does not automatically mean permanent confiscation.

Our View

Businesses operating in politically exposed jurisdictions should assess control risk as well as ownership risk.

Companies should ask:

• What assets remain in the jurisdiction?
• Who legally owns them?
• Who operationally controls them?
• Where are company bank accounts?
• Who can authorise payments?
• Where is intellectual property registered?
• Could licences be transferred?
• Who owns local inventory?
• Could management access be removed?
• Could dividends become trapped?
• Are intercompany loans outstanding?
• Could receivables become inaccessible?
• What happens to employees?
• Could suppliers continue without parent-company approval?
• What insurance responds to government intervention?
• Does political-risk insurance include expropriation or deprivation?
• What evidence of asset value is retained outside the jurisdiction?

Businesses should also distinguish between legal title and practical control.

A company can remain the technical owner of an asset while being unable to manage, sell, access or derive economic benefit from it.

An asset does not need to be formally confiscated to become commercially inaccessible.

Risk Indicator: HIGH – RUSSIA, POLITICAL RISK & FOREIGN CORPORATE ASSETS

Disclaimer

The information contained within these Market Alerts is provided for general market awareness and informational purposes only. It does not constitute financial, legal, investment, regulatory or insurance advice. Whilst every effort has been made to ensure accuracy at the time of publication using multiple reputable and independently verified sources, geopolitical events, legislation, regulation and market conditions may change rapidly. Readers should obtain appropriate professional advice before acting upon any information contained herein.

Invictus Risk Solutions LLP – Helping organisations stay ahead of emerging risks through informed insight and independent analysis.