Russia imposes effective capital controls on Western company exits

Russia is imposing effective capital controls on Western companies selling their operations in Russia with caps and deadlines on foreign currency transactions, the Financial Times reported on Tuesday, citing people familiar with the matter.

Reuters could not immediately verify the report. In August, Reuters exclusively reported that some companies trying to exit Russia were facing big jumps in costs as Moscow demanded ever larger discounts on price tags of assets they were seeking to sell.

Russia has steadily tightened exit requirements since Western companies started leaving soon after Moscow invaded Ukraine in February 2022. The rouble tumbled past the psychological threshold of 100 to the dollar in August and again in September, leading Russian authorities to introduce capital controls and the central bank to increase interest rates in an effort to defend the currency.

The rouble has recovered sharply in recent weeks. The FT cited an investment banker as saying that foreign currency transfers abroad had been limited to $20 million per day and a seven-day deadline had been imposed on closing a sale, effectively preventing sellers from receiving more than $140 million. Another person working on several exit deals said Russia’s government commission on foreign asset sales had imposed an informal cap of $500 million that could be transferred overseas.