Putin has signed a law allowing airlines to claim ownership of 500 foreign-owned planes worth around billion, but flying them could be unsafe.

Simone Del Rosario Business Correspondent

Russia stealing $10B of foreign planes, considers seizing other Western assets

Mar 15, 2022

Simone Del Rosario Business Correspondent

By Simone Del Rosario (Business Correspondent), Emma Stoltzfus (Video Editor)

Russian President Vladimir Putin is making good on a threat to nationalize assets of Western companies that suspend business over the war. This week, he took the first step by signing a law allowing the seizure of more than 500 foreign-owned planes worth around $10 billion.

The planes are leased to Russia’s airlines by foreign companies, which canceled the contracts following sanctions against Russia. Legally, airlines are required to return the planes to the owners, but that has been made increasingly difficult by Russian restrictions and this new law, which endorses stealing the planes and reregistering them under Russia’s aircraft registry.

Sanctions are keeping other countries from certifying these planes as safe to fly, and Western companies like Boeing and Airbus are unable to provide maintenance. Russia’s seizure of the aircraft allows it to domestically stamp approval to fly the planes, but without replacement parts or proper records, continuing to fly them could become increasingly dangerous.

This latest law marks Putin’s first major move to seize assets of foreign companies that pull up stakes or suspend operations. Some of the companies in question include McDonald’s, Coca-Cola, IBM, Apple, BP and Exxon. Dozens of firms throughout the U.S., Europe and Japan have voluntarily pulled out of the country over the past few weeks, either in protest of Russia’s invasion of Ukraine or because sanctions have made supply chain conditions too difficult to work.

Putin reportedly favors a draft law that would essentially nationalize assets left behind by these companies, selling operations to Russians to conduct business without the corporations behind them. The outlook is murky on how successful that could be in some cases. For instance, they could sell all of Apple’s existing merchandise in the country, but it’s not like they could make new iPhones. It may be a more realistic threat to companies like Exxon, which left $4 billion in assets behind.

Russia’s embassy in the U.S. claimed this draft law is “fake news,” writing in a tweet, “The decision whether to continue entrepreneurial activity in our country is entirely up to the Americans.”

White House Press Secretary Jen Psaki also responded to the reports, tweeting, “Any lawless decision by Russia to seize the assets of these companies will ultimately result in even more economic pain for Russia.”

Any lawless decision by Russia to seize the assets of these companies will ultimately result in even more economic pain for Russia. It will compound the clear message to the global business community that Russia is not a safe place to invest and do business.

— Karine Jean-Pierre (@PressSec) March 11, 2022

SIMONE DEL ROSARIO: RUSSIA’S MAKING GOOD ON A THREAT TO NATIONALIZE ASSETS OF WESTERN COMPANIES THAT SUSPEND BUSINESS OVER THE WAR. AND IT STARTS WITH STEALING PLANES.

RUSSIA’S AIRLINES COLLECTIVELY LEASE MORE THAN 500 FOREIGN-OWNED PLANES WORTH AROUND 10 BILLION DOLLARS. AND PRESIDENT VLADIMIR PUTIN JUST SIGNED A LAW THAT ALLOWS AIRLINES TO NOW REGISTER THESE PLANES IN RUSSIA.

SANCTIONS ARE KEEPING OTHER COUNTRIES FROM CERTIFYING THESE PLANES AS SAFE TO FLY – AND WESTERN COMPANIES LIKE BOEING CAN’T PROVIDE MAINTENANCE. RUSSIA’S SEIZURE OF THE AIRCRAFT ALLOWS IT TO DOMESTICALLY STAMP APPROVAL TO FLY THE PLANES – BUT WITHOUT REPLACEMENT PARTS OR PROPER RECORDS – CONTINUING TO FLY THESE STOLEN PLANES COULD BECOME INCREASINGLY DANGEROUS.

IT’S THE FIRST MAJOR STEP OF PUTIN’S TO TAKE THE ASSETS OF FOREIGN COMPANIES THAT PULL UP STAKES OR SUSPEND OPERATIONS. WE’RE TALKING THE LIKES OF MCDONALDS – COKE – IBM – APPLE – EVEN BP AND EXXON. DOZENS OF FIRMS FROM THE U-S, EUROPE AND JAPAN HAVE VOLUNTARILY PULLED OUT OF THE COUNTRY OVER THE PAST FEW WEEKS – EITHER IN PROTEST OF RUSSIA’S INVASION OF UKRAINE, OR BECAUSE SANCTIONS HAVE MADE SUPPLY CHAIN CONDITIONS TOO DIFFICULT TO WORK. AND NOW THAT PUTIN’S STOLEN 10 BILLION DOLLARS IN PLANES – THE NEXT THREAT SEEMS MORE LIKELY.

HE REPORTEDLY FAVORS A DRAFT LAW THAT WOULD NATIONALIZE THE ASSETS LEFT BEHIND BY THOSE COMPANIES – SELLING OPERATIONS TO LOCALS TO GO ABOUT BUSINESS WITHOUT THE CORPORATIONS BEHIND THEM. THE OUTLOOK IS PRETTY MURKY ON HOW SUCCESSFUL THAT COULD BE – THEY COULD SELL ALL OF APPLE’S EXISTING MERCHANDISE IN THE COUNTRY, BUT IT’S NOT LIKE THEY COULD MAKE NEW IPHONES.

IT MAY BE MORE OF A REAL THREAT FOR COMPANIES LIKE EXXON, WHICH LEFT FOUR BILLION IN ASSETS BEHIND.

RUSSIA’S EMBASSY IN THE U-S CLAIMS ALL OF THIS IS “FAKE NEWS.” SAYING THE DECISION TO CONTINUE BUSINESS IN RUSSIA IS ENTIRELY UP TO THE AMERICANS.

WHILE THE WHITE HOUSE SAYS ANY DECISION BY RUSSIA TO SEIZE THE ASSETS OF THESE COMPANIES WILL ULTIMATELY RESULT IN EVEN MORE ECONOMIC PAIN FOR RUSSIA.

IN NEW YORK FOR JUST BUSINESS I’M SIMONE DEL ROSARIO.