Putin seizes Russian operations of cigarette giant Japan Tobacco International

Key Points:

• Russian President Vladimir Putin ordered Japan Tobacco International's (JTI) Russian operations to be placed under state control, transferring them to the state-linked holding company AO Promyshlennye aktivy by decree.
• The takeover includes JTI's factories in St Petersburg, Rostov-on-Don, Lipetsk, and Leningrad regions, where the company employs about 4,000 people and holds roughly 40% of the Russian cigarette market.
• JTI, which has operated in Russia since 1999 and suspended new investments after Russia's invasion of Ukraine, joins other European companies like Nestlé and Metro whose Russian assets have been nationalized under similar mechanisms.
• The move follows heightened tensions between Russia and Japan, including the recent arrest of a Japanese journalist on espionage charges and ongoing disputes over Pacific islands, amid Japan's participation in Western sanctions against Russia.
• Russia's external management process allows state-appointed administrators to control foreign-owned assets without compensation, aiming to counteract sanctions and prepare for possible retaliatory measures against foreign nationalizations of Russian assets abroad.