War in Ukraine – French groups in no rush to leave Russia

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Since the start of the invasion of Ukraine, very few major French groups have declared their intention to cease operations in Russia. The French government remains discreet on the matter.

TotalEnergies has decided it will “no longer provide capital to new projects in Russia”.

AFP

A week after the outbreak of the Russian invasion of Ukraine, few major French companies have announced their cessation of operations in Russia, other than the “temporary” closures of luxury boutiques, as the French government carefully doses its messages.

The British BP, Shell and Jaguar Land Rover, the Americans ExxonMobil and Disney, the German Daimler Truck, the Norwegian Equinor, the Swedish manufacturer Volvo or the American tech giants Microsoft and Meta… many multinationals have distanced themselves from Russia. In France, the move is timid, apart from the luxury groups Chanel, Hermès, the world number one in the sector LVMH, and its competitor Kering, which announced on Friday that it was suspending its commercial activities in the country.

“A fundamental problem” for the government

At AFP’s request, cosmetics giant L’Oréal declined to comment. For its part, the shipowner CMA CGM announced that it would stop serving Russian ports, but more “for security reasons” than economic retaliation. TotalEnergies decided it would “no longer provide capital for new projects in Russia”, without mentioning any withdrawal from a country in which it has significant interests. “TotalEnergies’s position has been shared with the French authorities who have understood it correctly,” assures AFP the group, whose president Patrick Pouyanné was received on Tuesday evening both in Bercy and at the Élysée as part of a meeting of the Dialogue du Trianon, that unites Franco-Russian civil society organisations. As for the Societe Generale bank, which is highly vulnerable through its subsidiary Rosbank, it simply assured on Thursday that it could resist if robbed of these assets in Russia.

On the government side, Economy Minister Bruno Le Maire saw “a problem of principle” in the fact that companies work with those close to Russian power, but without calling on French groups to review their presence in this country. In the United Kingdom, the Minister for Enterprise Kwasi Kwarteng confirmed to him on Twitter on Monday that “there was” [désormais] a strong moral obligation on British business to isolate Russia”.

“No specific direction”

Bruno Le Maire also had to backtrack after claiming the European Union would “wage an all-out economic and financial war against Russia”, then deeming the word war “inappropriate”. His comments provoked a fierce reaction and thinly veiled threat from former Russian President Dmitry Medvedev. In government, the message is rather “support” companies exposed to the effects of the conflict and the sanctions imposed on Russia, Foreign Trade Minister Franck Riester said on Tuesday after meeting about 60 companies and professional federations.

After an update on the geopolitical situation and the evolution of the conflict, this meeting was also an opportunity for the Quai d’Orsay and Bercy to warn companies of the prospect of a long war, with the possibility of counter-Russian sanctions targeting western interests. The foreign ministry is now calling on travelers – tourists and professionals – to “leave the country without delay” and “postpone any trip to Russia”.

France: first foreign employer in Russia

“The perception of a conflict that could escalate and persist has had a strong impact on businesses, especially for a fairly resilient business community, which is quickly adapting to local conditions,” said a diplomatic source. Specifically, though, “no announcement or specific guidance has been given to companies on a position to take,” one participant told AFP. “There is no request to withdraw at this stage,” adds a participant from the agri-food sector.

Another makes sure he wasn’t asked to “recall expatriate employees”. “The government has not asked companies to stop their activities in Russia, but its representatives have asked whether measures are being considered,” confirmed another.

France is the largest foreign employer in Russia and the second largest provider of foreign direct investment and therefore not only has commercial relations with Russia, which could complicate a withdrawal from the country. “French companies are generally more investors, they are companies that have staff on site, so communication needs to be calibrated,” the diplomatic source said.

AFP

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