Russia Blocks Facebook, Passes Fake News Law; LVMH and Microsoft suspend sales
- Broad Western Sanctions Create Minefield for Investors
- Exxon faces ‘complicated process’ on exit
- SocGen has warned it could be stripped of Russian assets
- Toyota stops production, Russian Pirelli plants continue
- Banks count the ever-changing cost of sanctions
March 4 (Reuters) – Russia said it would block Facebook for excluding state media and CNN said it would stop broadcasting in Russia after a new law punishing “fake news” increased stakes in Moscow’s struggle with a foreign company.
Friday marked an escalation in the dispute that began after the invasion of Ukraine. Russia blocked a wave of media companies and new big names announced they were shutting down sales in Russia, including Microsoft Corp (MSFT.O) and video game maker Electronic Arts Inc (EA.O). Read more
Russia said Meta Platforms Inc’s (FB.O) Facebook was blocked for restricting state-backed channels, and it also blocked the websites of the BBC, Deutsche Welle and Voice of America for this which she called false information about the war in Ukraine. read more Twitter (TWTR.N) will also be blocked, according to Russian media.
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The BBC has said it will temporarily suspend work in Russia after the introduction of a new law that could jail anyone suspected of intentionally spreading “fake” news. Read more
AT&T Inc’s (TN) CNN is halting broadcasts to “assess the situation and our next steps moving forward,” a spokesperson said.
Meta’s head of global affairs, Nick Clegg, said the company will continue to do everything possible to restore its services.
“Soon, millions of ordinary Russians will find themselves cut off from reliable information, deprived of their daily means of connecting with family and friends, and prevented from speaking out,” he said in a statement posted on Twitter. .
Many Russians downloaded VPN software to avoid state restrictions, but internet provider Cogent (CCOI.O), which said it was the second-largest operator outside Russia, announced plans to cut service , in part to avoid being used for cyberattacks. Read more
A large number of major Western brands across a wide range of industries have left Russia. Some of the best known have harshly rebuked Moscow for the attack on Ukraine. Others described reacting to the circumstances, including luxury goods maker LVMH (LVMH.PA) which announced on Friday it would temporarily close 124 stores in Russia. Read more
Canadian Tire (CTCa.TO) also said it would temporarily close 41 Russian stores of its outerwear and luggage group Helly Hansen, and private jet maker Bombardier Inc said it had suspended all operations. with Russian customers, in accordance with international laws. Read more
Shipping and supply chain issues have also made it difficult to work in Russia. Companies from Royal Dutch Shell to Apple Inc (AAPL.O) to Toyota Motor Corp (7203.T) have taken action ranging from halting sales and operations to exiting altogether. Agricultural commodities trader Louis Dreyfus announced on Friday the suspension of its activities in Russia.
NO EASY ANSWERS
On Friday, Russian First Deputy Prime Minister Andrei Belousov presented options to foreign companies: stay in the country, exit entirely, or hand over their holdings to local leaders until they return.
No route comes without risk. Those who remain could face a backlash in Western markets where the public has rallied to Ukraine’s cause, those transferring shares could hand over the keys with few guarantees, while those who quit could at least better suffer a big loss or might have to sell for a nominal amount. sum.
“It’s a complicated process,” said Darren Woods, chief executive of U.S. energy firm Exxon Mobil Corp (XOM.N), which is ditching oil and gas investments involving partnerships with Russia’s Rosneft (ROSN.MM) and others worth $4 billion. Read more
Businesses had little time to prepare.
Russia’s invasion – which Moscow calls a “special operation” – prompted the United States and Europe to impose swift and sweeping sanctions, affecting everything from global payment systems to a range of high-tech products . Read more
“Western companies probably haven’t lost so much money so quickly to geopolitics since the Shah was overthrown in Iran,” said Renaissance Capital chief economist Charlie Robertson, referring to the Islamic revolution more than four decades ago that led to an exodus from the West. companies.
STAYING IN PLACE
Still, some companies plan to continue. Italian tire maker Pirelli (PIRC.MI) said it had set up a “crisis committee” to monitor developments, but did not plan to halt production in either other of its two Russian factories.
For companies packing their bags, Russia’s First Deputy Prime Minister said an accelerated bankruptcy plan “will support the employment and social welfare of citizens so that bona fide entrepreneurs can ensure the efficient operation of companies”.
So far, global companies, banks and investors have announced that they have exposure in one form or another to Russia of more than $110 billion. This amount could increase. Read more
BASF SE (BASFn.DE), the world’s largest chemicals group, said it was halting new business in Russia and Belarus, except food production for humanitarian causes. He also alluded to the minefield of the new rules introduced by the sanctions.
“BASF will only carry out activities in Russia and Belarus that fulfill existing obligations in accordance with applicable international laws, regulations and rules,” he said.
Swiss food giant Nestlé SA (NESN.S), maker of KitKat bars and Nescafé coffee, said it was halting advertising in Russia, while Swiss watchmaker Swatch Group said it would continue operations in Russia but would suspend exports.
Deutsche Bank (DBKGn.DE) said it had stress-tested its operations given its large technology hub in Russia, but was assured it could handle day-to-day business globally.
The German lender had opened a new office in Moscow in December, a move which it said represented at the time “a significant investment and commitment to the Russian market”.
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Reporting by Sabrina Valle in Houston, Giulio Piovaccari in Milan, Toby Sterling in Amsterdam, Silke Koltrowitz and John Revill in Zurich, Tom Sims and Frank Siebelt in Frankfurt, Kate Holton and Richa Naidu in London, Diane Bartz in Washington, Elizabeth Culliford in New York, Layli Foroudi and Gus Trompiz in Paris, Allison Lampert in Montreal and Tiyashi Datta, Arunima Kumar and Eva Mathews in Bengaluru; Writing by Edmund Blair and Peter Henderson Editing by Pravin Char, Nick Zieminski and Matthew Lewis
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