Netflix, TikTok, Samsung, and credit card operators such as MasterCard Inc and Visa inc have joined the lengthening list of businesses cutting ties with Russia or reviewing their operations in the country as reputational and financial risks mount, Bloomberg reported.
International sanctions, the closure of airspace and transports links due to the war, and the financial restrictions on SWIFT and capital controls have made it difficult – if not impossible – for many companies to supply parts, make payments, and deliver goods to and from Russia.
In addition, the potential international consumer backlash against any company perceived as helping Vladimir Putin’s regime means that the exodus of corporations from Russia has become a rout. This reverses three decades of investment there by foreign businesses after the Soviet Union broke apart in 1991, especially in energy.
Here are some of the biggest companies that have begun to unravel their connections:
The Big 4
EY, PricewaterhouseCoopers LLP (PwC), and KPMG LLP are pulling out of Russia in response to the war in Ukraine.
EY said in a statement it has “has commenced a restructuring of its Russian member firm to separate it from the global network.”
It said its operations in Russia have more than 4,700 people and EY will no longer serve any Russian government clients, state-owned enterprises, or sanctioned entities and individuals anywhere in the world.
In separate statements Sunday, PwC said PwC Russia will leave the global network.
KPMG announced similar measures for its business. PwC has 3,700 staff in Russia, while its rival has more than 4,500 people in Russia and Belarus.
Deloitte, the other member of the so-called Big Four professional services firm, said in a statement the network “is currently reviewing our business and presence in Russia.”
Deloitte doesn’t serve any entities of Russia’s central government, the statement said.
Oil and Gas
Russia’s largest foreign investor, BP Plc, led the way with its announcement on Feb. 27 that it would exit its 20% stake in state-controlled Rosneft, a move that could result in a $25 billion write-off and cut the company’s global oil and gas production by a third.
Shell Plc followed, stating that it would end partnerships with state-controlled Gazprom, including the Sakhalin-II liquefied natural gas facility and its involvement in the Nord Stream 2 pipeline project, which Germany blocked last week. Both projects are worth about $3 billion.
Exxon Mobil Corp. said it would “discontinue” its Sakhalin-1 operations.
Equinor ASA, Norway’s state-owned energy giant, said will start withdrawing from its joint ventures in Russia, worth about $1.2 billion.
In parallel, Norway’s sovereign wealth fund, the world’s largest, said that it is freezing Russian assets worth about $2.8 billion and will come up with a plan to exit by March 15.
Finance
Visa Inc. and Mastercard Inc. said on Saturday they are suspending operations in Russia. In separate statements that arrived within minutes of each other, Visa cited “Russia’s unprovoked invasion of Ukraine, and the unacceptable events that we have witnessed,” while Mastercard referred to the “unprecedented nature of the current conflict and the uncertain economic environment.”
Ukrainian President Volodymyr Zelenskiy had called on the companies to halt all business in Russia during a video call with US lawmakers.
Each gets about 4% of its net revenue from business linked to Russia. American Express followed on Sunday.
Some critics argue that the steps aren’t enough. While the companies said any transactions initiated with their cards issued in Russia will no longer work outside the country and cards issued outside of Russia won’t work at Russian merchants or ATMs, consumers inside Russia who have a locally issued card can still pay for goods and services there.
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