Corporate Russian roulette: Why France must issue guidance urging companies to leave Russia now
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French authorities must investigate Le Monde’s claims that retailer Auchan seems to be contributing to Russia’s war efforts in Ukraine and do more to urge businesses to cut ties with Russia, says B4Ukraine — an international coalition of more than 80 civil society organisations and French partner organization, Stand With Ukraine.

  • 66% of the French firms which had ties to Russia at the start of 2022 continue to do business within the country
  • The French companies remaining paid at least $1 billion in taxes to Russia in 2021 — enough to fund Russia’s war against Ukraine for 3 days
  • For every $2 the French government declares in bilateral aid to Ukraine, its companies may still be paying $1 in taxes to the Russian state

66% of the French firms which had ties to Russia at the start of 2022 continue to do business with the country, a new analysis of 3,078 multinationals reveals.

Based on data from the Kyiv School of Economics, the analysis titled “Unfinished Business” found 106 of French companies which had ties to Russia at the start of 2022 continue to do business in the country.

Of the 94 French firms with Russian subsidiaries at the start of the war, 11 have fully exited, about 12% or just over one in ten.

“One year after the invasion and nine years since the beginning of Russia’s aggression, this is far too little progress,” said Eleanor Nichol, Executive Director of the B4Ukraine Coalition. “While the French government has been supporting Ukraine, providing billions of pounds in support, 106 of their major companies have chosen to continue doing business with the regime — continuing to pay taxes and indirectly supporting this horrific war and undermining sanctions.”

When compared to French contributions in aid, for every $2 the French government declares in bilateral aid to Ukraine, its companies may still be paying $1 in taxes to the Russian state.

Consumer goods and energy, oil and gas companies headquartered in France have been particularly slow to leave. Notable examples include Leroy Merlin and Auchan. B4Ukraine is calling on the French government, a leading democratic force in the world, to immediately issue business advisory notices urging companies to stop doing business with Russia and informing individuals, companies, financial institutions, and other persons — including investors, consultants, and research service providers — of the heightened risks associated with doing business in Russia, and particularly business activity that could benefit the Russian military or any affiliated paramilitary groups.

“While the companies doing business with Russia are reporting on their increased profits in the past year, Ukrainians are recounting their losses: the millions of lives forever disrupted by over 70,000 Russia’s war crimes, tens of thousands of casualties among the Ukrainian civilians, including 461 children. Over 5,300 missiles and kamikaze drones targeting critical infrastructure, apartment blocks, schools, and hospitals across Ukraine were made possible in part by the taxes paid by multinationals in Russia,” says Nataliia Popovych, member of the B4Ukraine Coalition.

Despite the high number of companies remaining, 54 French companies have recognized the risks and begun the process of cutting ties with Russia. There have also been some consequential French exits from the Russian market — such as Societe Generale and Renault — serving as an example that a swift and orderly exit from Russia is possible.

Remaining companies must now also grapple with changes to domestic law requiring them to facilitate conscription for eligible employees and provide material support to the Russian military upon request, as well as threats of government expropriation of their assets.

“French companies are playing a potentially lethal game of corporate Russian roulette by willfully accepting exposure to an array of regulatory, legal, reputational, and financial risks by continuing to do business in Russia,” said Edward Mayor, Member of the B4Ukraine Coalition/Stand WIth Ukraine. ”Our government must not only investigate the Le Monde allegations on Auchan but also take all possible steps to urge French businesses to leave Russia, including issuing guidance on Russia which clearly conveys these heightened material risks to their domiciled companies.” In a statement, Auchan Retail denied the statements made in Le Monde’s investigative report and their interpretation.

B4Ukraine urges the French government and its economic agencies to use all available powers not to support trade and investment activity with Russia, including withholding public money from companies which continue doing their business operations in Russia.

The data used for this analysis is accurate as of 14 February 2023

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