47 of the world’s biggest 200 companies still haven’t left Russia. Now the Kremlin is preparing ‘expropriation blackmail,’ an expert says, 14 August 2022

In the six months since Russia invaded Ukraine, around 300 global companies have exited the Russian market, and another 700 have halted new investments and projects, or curbed operations in the country...But not all global companies have retreated from the country. Around 47 of the world’s 200 biggest companies are still doing business in or with Russia. The process of leaving, after all, can come with major costs. Now, after concerning new moves from the Kremlin, experts say the companies that stayed are now at heightened risk of nationalization as Russia wrestles with how to best deal with the mass corporate exodus, and seeks greater control of their economy...

If it was once a difficult decision for companies to stay in Russia or leave, it could get a lot easier if Putin decides for them.

On July 1, he signed a decree to allow the government to seize the Sakhalin-2 oil and natural gas project. The Kremlin order gave control of Sakhalin-2 to a new, state-created firm that could strip foreign investors of their rights if it wants to, one of the most forceful moves by the government in response to the corporate exodus. U.K. energy giant Shell and Japanese trading firms Mitsui and Mitsubishi hold double-digit stakes in the Russian energy project...

The decree demonstrates that Russia is not just willing to expropriate foreign assets, but is also positioning itself to engage in “expropriation blackmail,” Mark Dixon, founder of the Moral Rating Agency, a research organization focused on foreign firms in Russia, wrote in a July report.

The Sakhalin-2 case shows that foreign investors have already been expropriated, and that Russian authorities are giving them the chance to either agree to the new terms of the new entity that now controls the energy project—or lose everything, Dixon told Fortune this week.

“We anticipate a tsunami of expropriations or blackmailed concessions over the next couple of months,” Dixon wrote earlier this year.

Other experts agree. The Russian government will nationalize—which amounts to expropriation or confiscation by the state—“one foreign company after the other” because of the lack of options available, Anders Åslund, an economist, former senior fellow at the Atlantic Council, and author of Russia’s Crony Capitalism, told Fortune. Russian assets can’t be sold easily because of the dearth of foreign buyers, plus, for those companies that have exited, the companies can’t leave them without owners, he says...