Russia is increasingly isolated. The punitive measures imposed by states have been joined by private sanctions from companies, from Ikea to H&M.
Since the end of 1991, when the Soviet Union was formally dissolved, foreign capital has also flowed into Russia. The regime of Vladimir Putin, which has continued uninterruptedly since 2000 across his terms as president and prime minister, had already been criticised on multiple occasions for its strongly authoritarian character. With the invasion of Ukraine, however, it seems a line has been crossed. Following the extremely severe punitive measures imposed by states, private sanctions have also arrived. Countless companies have decided to cut ties with Russia, expressing their strong opposition to the war unleashed in the heart of Europe. And at the same time protecting themselves from considerable economic and reputational risks, given that thousands of people around the world are taking to the streets to express their solidarity with the Ukrainian people. The Yale School of Management has drawn up a list; on 10 March it counted more than three hundred names.
Over these three decades, the presence of oil giants in Russia has been massive. On 27 February, the decision by British company Bp to exit Russian firm Rosneft, in which it held a stake of 19.75 per cent, caused a stir. In doing so, Bloomberg argues, it risks a write-down of 25 billion dollars and the loss of roughly one third of its gas and oil production.
Dutch company Shell has ended its partnership with Gazprom, controlled by the Russian government. Among the projects wound down are the Sakhalin-II oil and liquefied natural gas extraction facility (on the eponymous island in the Sea of Okhotsk) and the Nord Stream 2 pipeline, already blocked by Germany. Equinor, in which the Norwegian government holds a stake, announced the end of its joint ventures in Russia; American company ExxonMobil has abandoned Sakhalin-I, the "twin" of Sakhalin-II; Italian company Eni intends to sell its stake in the Bluestream pipeline connecting Russia and Turkey.
French company TotalEnergies (previously known as Total) has been more cautious: after enormous public pressure, it announced that it no longer wishes to invest in Russia in the future. Without, however, winding down existing projects.
Among the private sanctions that have caused the most noise, including in the media, are those concerning the world of football. All Russian teams, including the national side, will be excluded from international competitions until further notice. No Champions League, no 2022 World Cup in Qatar, no Euro 2024. The announcement was made in a joint statement by Fifa and Uefa.
In a move that left supporters stunned, Russian businessman Roman Abramovich decided to sell the English football club Chelsea, which he acquired in 2003 and has since led to the highest levels in the Premier League and in Europe. The proceeds, he promised, will be reinvested to create a foundation dedicated to the victims of the war in Ukraine.
According to some reports gathered by the New York Times, the invasion of Ukraine immediately after the end of the Beijing Winter Olympics would not be a coincidence, but rather the outcome of an agreement with Chinese diplomats. On 4 March the Winter Paralympics begin, but Russian and Belarusian athletes are not admitted.
In the automotive sector too, the response has been unanimous. Volvo will halt the production and sale of cars and commercial vehicles in Russia. Harley Davidson, Daimler Trucks, Jaguar Land Rover, Ford, Mercedes-Benz, Iveco, Ferrari and General Motors have also halted deliveries. Japanese car manufacturers have also ceased exports to Russia, including Toyota (which from 4 March is closing its Saint Petersburg plant), Honda and Mazda. Mitsubishi is still evaluating. Michelin tyre production has been suspended.
Some of the world's most popular brands have decided to turn their backs on Russia. Swedish furniture giant Ikea on 3 March announced the closure of all its department stores in Russia and a halt to the supply of raw materials from Russia and Belarus. The consequences for its own business are considerable, as Russia accounts for 4 per cent of sales, representing a turnover of 1.6 billion euros. Its 15,000 employees will continue to receive their salary for at least the next three months. Ikea had already planned to raise the average prices of its products by 9 per cent, due to rising raw material costs and disruptions to the global supply chain. That estimate has been revised upwards, to 12 per cent.
The windows of shopping centres and city-centre streets have been almost entirely emptied as a result of private sanctions. H&M, the well-known Swedish fast fashion brand, first closed its stores in Ukraine for safety reasons. It then also closed those in Russia, announcing the move with a statement in which it "joins all those around the world calling for peace." On 4 March, French luxury group Hermès also announced, via a post on LinkedIn, the closure of its stores and the suspension of all commercial activities. The employees in the country number around sixty. Shipments of garments from Burberry, Chanel, Levi Strauss, Puma, Yoox have been halted. The stores of groups Inditex (which also includes the brands Zara, Bershka, Stradivarius, Pull and Bear and Oysho) and Kering (Gucci, Yves Saint Laurent, Balenciaga, Alexander McQueen, Bottega Veneta and others) are pulling down their shutters. Lvmh (Louis Vuitton), Prada and Moncler are suspending all activities in Russia.
It was 31 January 1990 when Moscow residents queued from 4 in the morning to bite into a burger at the first McDonald's to open on Soviet Union territory. Images that passed into history, because they bore witness to people's desire to embrace a Western lifestyle from which they had long been excluded. Long queues also formed outside the fast-food restaurants on the evening of 8 March 2022, following the company's decision to temporarily close its 850 outlets in the country. Its 62,000 employees, it assured, would continue to receive their salaries.
Starbucks cafés are also pulling down their shutters; there are around a hundred of them in Russia. Restaurant Brands International, the group that owns the Burger King brand, has chosen a different path: the approximately eight hundred franchise fast-food restaurants will remain open, but profits will be directed towards humanitarian aid.
Nestlé, the world's largest packaged food producer with a turnover of over 82 billion euros, will no longer invest in Russia and will no longer run advertising campaigns there. The same goes for Unilever and Procter & Gamble. Unilever has also halted exports and imports, but has promised to continue supplying food products and hygiene items (such as soaps and detergents) deemed "essential" to the population's needs. Mondelez, the group behind brands such as Philadelphia, Oreo and Milka, will scale back operations while maintaining supply chain continuity.
Rivals Coca-Cola and PepsiCo joined the long list of private sanctions on 8 March; the former announced the suspension of all activities in Russia, the latter is halting both production and sales. In the beer sector, Heineken is suspending all activities while Carlsberg is limiting itself to new investments.
The new Batman directed by Matt Reeves, starring Robert Pattinson, was due to open in Russia on Thursday 3 March. 10 March would have been the turn of the animated film Red. Neither, however, will reach cinemas, by decision of their respective production companies, Disney and Warner Bros. Netflix has halted the acquisition of Russian titles and new projects in Russia. Sony Pictures is also postponing the release of its films – starting with Morbius, inspired by the Marvel comic of the same name – and has stopped PlayStation shipments.
Apple has halted sales of its products in Russia. It has also imposed further private sanctions, restricting its payment service (Apple Pay) and removing two government-run agencies, Russia Today and Sputnik, from the App Store for users outside Russia. Its main competitor, Samsung, has halted shipments of its products; not just smartphones, but also microchips and other consumer electronics. The other technology giant, Microsoft, has paused not only sales but also some business activities in Russia, thereby aligning its private sanctions with those imposed by governments. The electronic payment services offered by PayPal are also suspended until further notice.
The Financial Times reports that the so-called big four – Deloitte, EY, KPMG and PwC – employ around 13,000 people in Russia and count among their clients major state-controlled enterprises, including Sberbank, Gazprom and the Russian central bank. Initially they expressed words of condemnation regarding the conflict; between 6 and 7 March they announced that their Russian offices would break away from the global network, becoming fully independent companies in every respect. Accenture and BCG are also suspending all activities in Russia.
There are around thirty international law firms that, before the conflict began, had an office in Moscow. Eversheds Sutherland is closing it, along with its St Petersburg office, and is refusing to represent the Russian government or oligarchs. The Moscow offices of Freshfields Bruckhaus Deringer,
