Russia's president signed a decree placing Japan Tobacco's local subsidiary under the temporary control of a Russian company. Amid worsening relations between Japan and Russia, a new countermeasure targeting foreign companies' management rights is being taken.
Russian President Vladimir Putin signed a decree placing four local subsidiaries of the Japan Tobacco (JT) Group under the control of Russian companies. JT has the largest share of the Russian market and employs approximately 4,000 people locally.
Since 2023, Russia has introduced a system placing foreign companies' assets under temporary control to circumvent sanctions imposed by Western countries. While ownership of the foreign companies remains unchanged, they effectively lose management control.
Similar measures have been applied to the local subsidiaries of Western companies, including Nestlé and Carlsberg. Many remain under state control, while some have been forced to sell their businesses.
Because the Japanese government holds approximately one-third of JT's shares, the measure will also affect assets held by the Japanese government. More than 100 Japanese companies continue to maintain operations in Russia even after the invasion of Ukraine.