24 May 2023

...Multinationals, CEOs, administrations, lawmakers, party leaders and heads of state have all been the target of Ukraine's uncompromising censure. But the scolding strategy, which merges techniques of diplomacy, public relations and social media, has at times put Western allies in an evidently uncomfortable position, much to their chagrin.

This simmering tension has again come to the surface over Ukraine's list of "international sponsors of war," a compendium of foreign companies that, in Kyiv's view, support the war through their decision to continue doing business in Russia, paying taxes to the central government and propping up the federal budget that bankrolls the military...

Since its launch last summer, the list has grown in size and currently encompasses 102 individuals and 26 companies, 17 of which have links to the European Union.

One of them is OTP Bank, Hungary's largest commercial bank, whose addition earlier this month triggered a furious response from Budapest. Péter Szijjártó, the country's foreign affairs minister, called it "unacceptable" and "scandalous" and demanded its immediate withdrawal...

The row further escalated when the Hungarian government, in retaliation for the listing, used its veto power to block a new tranche of €500 million in EU military assistance for Ukraine. Budapest made it clear the hold-up will last as long as the bank remains designated...

What is perhaps most remarkable about Ukraine's list of "international sponsors of war" is the fact that it is absolutely devoid of legal power. Being on the list does not entail the freezing of assets, a travel ban, trade restrictions or any other consequence akin to a sanction.

The list, which is managed by Ukraine's National Agency on Corruption Prevention (NACP), is essentially a name-shaming exercise designed to pile pressure and inflict a degree of reputational damage that is profound enough to make a foreign company cut all ties with the Russian Federation.

But the selection made by the NACP appears to be extraordinarily narrow – just 26 companies – compared to the vast reality on the ground: according to a study by Yale University, hundreds of firms maintain commercial operations in Russia in defiance of international condemnation...

"There are no formal selection criteria," a NACP spokesperson told Euronews. However, the spokesperson explained, in practice the company should be of non-Russian origin, run a large-scale operation, have a well-known brand, be present in various jurisdictions and, most crucially, assist the war in an indirect manner.

"By paying taxes, supplying key goods or materials, taking part in propaganda or mobilisation campaigns, such company indirectly contributes to and keeps up Russia's capacity to wage the war," the spokesperson said.

This indirect link is the trickiest element behind the register: due to corporate secrecy and the opacity of the Russian state, it is difficult to draw a convincing line between doing business and subsidising a war...