The United States and the European
Union have placed a number of sanctions on Russia as punishment for supporting
the pro-Russian separatists attempting to carve out independent states in
Ukraine. As a result of these sanctions
numerous European and American multinational firms operating in Russia have
experienced retaliation in Russia. The
retaliation has been defined as tit-for-tat and seen as immature by the western
world.
The article gave a
number of examples of companies feeling the effects. One of these companies was
McDonald’s. In the case of the fast-food chain, health inspectors made a
surprise check on a location and filled a frivolous lawsuit that can only be
seen as retaliatory. However this is not the worst action to be seen by the
Russian government. Currently, the
government is looking at seizing foreign media assets as well as the
consideration of laws, which would allow the government to seize foreign-owned
assets.
The situation
between Russia and the Western world is causing and will cause a hamper on
business done within the country for the near future. Many multinationals have
reported losses and have moved their employees out of Russia due to the volatility
of the situation.
Source: http://www.nytimes.com/2014/11/07/business/international/in-ukraine-crisis-us-businesses-face-tit-for-tat-response-to-sanctions.html?ref=international&_r=0
Even if the Russian government put in laws that could allow them to seize foreign-owned assets, wouldn't the UN not allow it or veto those laws? I don't know how much power the UN has but I would believe that other countries would want their businesses to be allowed in other countries, especially countries that are in the UN.
ReplyDeleteI don't really understand how Russia can just seize foreign assets. Wouldn't the foreign companies have rights to these assets and it would be illegal to just take hold of them. Also, even if Russia did start to continue this tit for tat business and take foreign assets then the U.S. and EU would probably tighten the sanctions on Russia. Since the EU purchases almost half of Russia's exports and the EU is Russia's biggest supplier of FDI they would have to obey the EU. If the EU shut off all importation from Russia, Russia would be devastated.
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