We will continue to provide updated information on a bi-weekly basis.

Prepared by the KSE Institute team and KSE members of the Board of Directors with the support of the International Renaissance Foundation; 02.11-19.11.2023.

Disclaimer: At the beginning of the Russian invasion of Ukraine KSE Institute launched an analytical project, which was named “SelfSanctions”, aimed to collect data on foreign companies operating in the Russian market and limiting or terminating their activities. Examination of data was conducted jointly with specialists from the Ministry of Economy, the Ministry of Foreign Affairs and the Ministry of Digital Transformation of Ukraine. The database contains a lot of information, we collect daily statistics on changes in the status of foreign companies operating/operated in the Russian market and limiting or terminating their activities. Also, we created the Telegram bot https://t.me/exit_ru_bot for tracking/monitoring of news on priority foreign companies (coverage 1, 2, 3 or 7 days of monitoring). Also, we do regular analysis of changes in share prices and capitalization of parent groups of companies that have or have had business in Russia.

KSE database is partly based on the Yale’s School of Management database, the University of St.Gallen latest Paper, epravda.com.ua, squeezingputin.com, https://bloody.energy/ and leave-russia.org websites and other open sources. Data is verified and KSE status is assigned. Data on stocks is taken from Google and Yahoo Finance. At the same time, the KSE database is more complete and comprehensive and contains much more information than most other similar databases, as it also includes data on number of staff, revenue, capital and other financial indicators, the latest updates and changes in statuses, links to used sources, and daily updates from the telegram-bot etc.

KSE Institute and Leave Russia project are the part of B4Ukraine Coalition since mid-2022.

KSE Institute is glad to announce have finalized merging with project leave-russia.org which was developed by a team of volunteers.

Also, we developed a barcode scanner, which is available here: https://leaverussia.kse.ua/ (only for mobile devices!) or in our Telegram bot https://t.me/exit_ru_bot. It allows you to find any brand or company that is operating in Russia just by scanning barcodes.

KSE DATABASE SNAPSHOT as of 19.11.2023

Number of the companies that continue Russian operations (KSE’s status «stay»¹) – 1 551 (+48 per 3 weeks)

Number of the companies that have reduced current operations and hold off new Investments (KSE’s status «wait») – 548 (-4 per 3 weeks)

Number of the companies that have curtailed Russian operations (KSE’s status «leave») – 1 221 (+6 per 3 weeks)

Number of the companies that completed withdrawal from Russia (KSE’s status “exited”) – 297 (+1 per 1 weeks)

As of November 19, we have identified about 3,617 companies, organizations and their brands from 96 countries and 58 industries and analyzed their position on the Russian market. About 40% of them are public ones, for ~1 526 public groups of companies, we also identified (where it was possible) their operating business in Russia (the presence of a controlling stake in a legal entity and revenue received) and found the data for 2021 before invasion was started, which allowed us to calculate the value of capital invested in the country (about $193.2 billion), local revenue (about $314.6 billion), local assets (about $336.7 billion) as well as staff (about 1.440 million people) and taxes paid (about $25.4 billion). 1,769 foreign companies have reduced, suspended or ceased operations in Russia. Also, we added information about 297 companies that have completed the sale/liqudation of their business in Russia based on the information collected from the official registers.

As can be seen from the tables below, as of November 19, 297 companies which had already completely exited from the Russian Federation, in 2021 had at least 491,500 personnel, $81.9 bn in annual revenue, $42.4bn in capital and $69.1bn in assets; companies, that declared a complete withdrawal from Russia had 248,400 personnel, $41.3bn in revenues, $17.0bn in capital and $28.2bn in assets; companies that suspended operations on the Russian market had 92,800 personnel, annual revenue of $24.4bn, $35.3bn in capital and $84.2bn in assets.

In the current climate of globalization and integration, the Russian government pays special attention to regional policy. The Russian Far East is an important link in Russia’s integration into the Asia-Pacific region. Over the past few years, the Russian government has paid considerable attention to the economic development of the Russian Far East, in particular, one of Russia’s key regional economic partners is Japan.

The Russian Far East has always been of interest to many Japanese companies, with the latter increasingly considering Russia as an important part of the global market. Expanding cooperation in the economic sphere should contribute to solving many problems, in particular, the long-standing territorial dispute over the Kuril Islands.

The Far East of Russia, which is the closest part of Russia to Japan, consists of several regions, including the Republic of Sakha (Yakutia), the Khabarovsk Territory and the Kamchatka Region. Beneath these vast regions lie significant mineral resources such as gold and silver and energy resources such as oil and natural gas. At the same time, the coastal part of the Far East of Russia is rich in marine resources, that is, all this indicates the “dormant potential” of this region (which, however, has gradually disappeared in recent years).

Taking this into account, Japan has three consulates general in the Far Eastern Federal District of Russia, in particular, in Vladivostok, Khabarovsk and Yuzhno-Sakhalinsk. The Tottori Trade Center was established in Vladivostok and Hokkaido representative offices and the Wakkanai City Hall operates in Yuzhno-Sakhalinsk. The Permanent Mixed Commission “Far East – Hokkaido” operates at the level of regional administrations of both sides, and at the level of business and economic relations, Russian-Japanese investment forums dedicated to Russian-Japanese cooperation in the Far East are held.

Large-scale development of Russian resources with the participation of Japanese companies is of strategic importance for Japan, since the Russian Far East is geographically close to this country and ensures its energy security, therefore, in Japan, rather close attention is paid to the above-mentioned regions of Russia.

Several small and medium-sized enterprises in Japan have decided to use the system of special economic zones of the Russian Far East for direct investments, in particular, in agriculture, tourism, health care, etc. So, among the largest investors in the economy of the Russian Far East today is Japan, second only to China in a number of indicators.

But, at the moment, the development of Russian-Japanese economic relations is hindered by the crisis situation in Russia. Most of the Japanese companies that worked in Russia before its invasion of Ukraine ignore calls to leave the Russian market, as the companies prefer profits to bloodshed in Ukraine, which is “too distant” for them.

According to a survey by the Japan Foreign Trade Organization, after the start of the Russian-Ukrainian war in 2022, 55.9% of Japanese companies immediately felt the negative effect of Western sanctions⁶

Western sanctions added even more uncertainty to the unfavorable business climate in Russia, and they increasingly became a deterrent to Japanese-Russian economic cooperation. The central role of the US financial system and the dominance of dollar-denominated trade limit the business opportunities of Japanese companies in Russia and suppress the scale of economic cooperation. Despite Tokyo’s full political commitment to Washington, the Japanese Government has been unable to significantly influence the Japanese private business sector regarding its cooperation with Russia. In particular, Japanese and Russian companies gradually adapted to Western sanctions against Russia, in particular, financial restrictions, developing compliance mechanisms.

For reference: in August 2022, one of the largest Japanese companies, JERA, signed a gas supply agreement with the new Russian operator of the Sakhalin-2 oil and gas project in the Russian Far East. At the same time, the Japanese company Toho Gas, the third largest company in the supply of gas in Japan, extended the contract for the purchase of liquefied gas under the same project. Also, according to a review by the Observatory of Economic Complexity (OEC)⁷ in 2022, the main Japanese export goods in Russia were cars and related components, and, on the other hand, energy carriers and precious metals prevail in Russian exports.

In July 2023, Japan increased the export of passenger cars to Russia by 84.9% compared to the same period last year. At the same time, in July of this year, Japan increased its export of buses and trucks to Russia by 60.2% and by 44.4%. Also, in July 2023, Japan increased the volume of exports of medical products to Russia by 1,123.2% (!) compared to the same period last year. In June 2023, this indicator was also growing, increasing by 308.5% compared to the same month in 2022⁸.

Japan’s import of aquatic biological resources from Russia in 2022 reached a record 155 billion yen (1.15 billion US dollars). This is the highest volume of Japanese imports of fish and seafood from Russia since 1992. One of the reasons is the reorientation of Russian exporters from Western markets. In general, the share of Japanese imports from Russia accounts for about 40% of all fish and seafood. In terms of the volume of supplies to Japan, Russia in 2022 came in third place (behind Chile and the USA). Snow crab was the most imported from Russia – for 32.6 billion yen (241 million US dollars), and the value of imports of Russian surimi increased approximately seven times compared to the previous year – to 7.4 billion yen (54.7 million US dollars). At the same time, the supply of sea urchins and salmon also increased⁹.

For reference: the export of products of the agro-industrial complex from the Primorsky Region to Japan in January-May 2023 increased by 1.2 times and amounted to 696 million US dollars. The main volume is accounted for by fish, seafood and soy. Including exports of fish and seafood reached 565 million US dollars, soybeans – 85.3 million US dollars, soybean oil – 23 million US dollars, corn – 12.4 million US dollars, meat and milk – 4 .6 million US dollars¹⁰.

It is especially worth noting that with the beginning of the Russian-Ukrainian war, Russia disrupted the energy landscape in the world. At the same time, the main part of Japanese investments in the Far Eastern region of Russia is directed to the oil and gas sectors (Sakhalin-1 and Sakhalin-2 projects), and Japan intends to continue to hold concessions in these projects, as they are stable sources of long-term and inexpensive energy and important for the lives of Japanese citizens and the country’s business activity. These projects were developed to diversify energy sources in Japan – the Japanese will never forget the oil shock of the 1970-s and the threat to the country’s energy security. Japanese officials view continued exploitation of Sakhalin’s resources as an imperative for Japan’s energy security. At the same time, there are certain fears in Japan that Russia may punish Japan by stopping the supply of energy resources, since Japan has joined Western countries in imposing economic sanctions against Russia and should comply with them not only declaratively.

At the same time, for Japan, the Far East of Russia is the nearest Russia. Moreover, Vladivostok is the closest “European” city to Asian countries, and it is not just about cooperation between Japan and Russia, but about the formation of export energy and industrial bases in the Far East. As an example, Vladivostok is a symbol of economic cooperation between Japan and Russia, in particular, Japan currently ranks fourth in the world among the leading buyers of seafood from Russia. No wonder, as early as 2021, putin emphasized that “the anticipatory development of the Far Eastern regions of Russia is our absolute priority for the entire 21st century” – the significance of the Far East in the context of the search for new markets and investments in the East has increased¹¹.

However, at this time Russian-Japanese economic relations are in a state of pause. The freezing of Russian-Japanese business cooperation in the Far East will not be able to torpedo the economy of this region, since projects with Japanese investments, which are already operating and which are still planned, can be replaced by China, South Korea or India. It is primarily about the forest industry, agriculture and automobile manufacturing. In turn, Japan may miss out on Russian wood, grain and coal. After Japan, under the pressure of the USA, deprived Russia of the status of the country to which the regime of the most favorable trade applies, the supply of seafood to the islands, primarily crab and salmon, came into question.

For reference: the number of cars on sale in the Far East of Russia has halved after Japan imposed a ban on the supply of cars with mileage to Russia, Japan banned the export to Russia of cars with an engine of more than 1.9 liters, as well as all hybrids and electric cars. Japanese manufacturers stopped supplying new cars in the spring of 2022. Japanese cars with powerful engines accounted for 20% of all foreign cars arriving in Russia with mileage, and hybrids accounted for another 30%¹².

In 2022, in Tokyo, it was stated that the world faced the most difficult and complex situation in the field of security since the end of the Second World War. In this context, it should be noted that recently, Japanese Prime Minister Fumio Kishida, speaking online at the 3rd summit of the International Crimean Platform in Kyiv, stated that Japan will provide various assistance to Ukraine in the amount of up to 7 billion US dollars, depending on needs. In addition, Japan will use its experience and knowledge in the field of post-war reconstruction and recovery after natural disasters to provide assistance, he said. Kishida reiterated that Japan consistently supports the sovereignty and territorial integrity of Ukraine, including Crimea, and will continue to cooperate closely with the international community, including the G7 countries, and will join sanctions against Russia, providing constant support to Ukraine. As Kisida emphasized, “Japan is on the side of the people of Ukraine in order to ensure peace and return it to the beautiful Ukrainian land.”¹³.

Considering this, Japan really can and should become an important part of the anti-Russian coalition in the Far East.

What’s new last month – key news from Daily monitoring

(updated on a bi-weekly basis)¹⁴

Recently we made a lot of significant improvements in our Telegram-bot with improving the interface, adding overall statistics and reflecting on the latest KSE statuses of companies taken from the KSE public database.

KSE team has incredible news about the project again! We are not standing still, and in addition to supporting and developing our database, which currently contains the world’s most comprehensive information on the activities of global corporations on the Russian market, we are also developing our technical products. We developed a barcode scanner, which is available at the link https://leaverussia.kse.ua/ (only for mobile devices!) or in our Telegram bot https://t.me/exit_ru_bot! To use the scanner, you need to have a mobile phone, scan the barcode of the product in the store (or anywhere else) with a camera, and you will see information about its manufacturer and whether it also operates in Russia.

Also, thanks to the use of ChatGPT, for most companies in the consumer sector, we have created the most complete list of 7500+ major brands and trademarks, so the search has become even more convenient and better. In addition, the scanner can be saved as a regular app on the smartphone home screen and Eng/Ukr versions are available.

In July 2023, the KSE Institute, jointly with the B4Ukraine coalition partners published a new research entitled “The Business of Staying: a closer look at multinational revenues and taxes in Russia in 2022”, you can download its full text in English using the following links: https://kse.ua/wp-content/uploads/2023/07/The-Business-of-Staying-1.pdf and https://b4ukraine.org/pdf/BusinessOfStaying.pdf 

Also, in September 2023, the KSE Institute jointly with the B4Ukraine coalition partners published another research entitled “The Business of Leaving: How Multinationals Can Responsibly Exit Russia”, you can download its full text in English here: https://b4ukraine.org/pdf/B4Ukraine_Business_of_Leaving_report.pdf

KSE’s Barcode Scanner (mobile devices only)

KSE Telegram bot on news monitoring @exit_ru_bot

Twitter of SelfSanctions project

Leave-russia.org website

BI analytics @ Leave-russia.org

Company news @ Leave-russia.org

Twitter of leave-russia.org website 

LinkedIn of leave-russia.org

YouTube of leave-russia.org

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¹ – KSE status “leave” – Companies that have published on the company’s official website (or their release has appeared in a foreign publication such as FT, NYT, etc.) that are completely shutting down in Russia or companies that have officially announced that they are temporarily reducing operations in Russia
– KSE status “wait” – Companies that have published on the company’s official website (or their release has appeared in a foreign publication such as FT, NYT, etc.) that they are reducing only part of their business operations by continuing to work on other operations or companies that have reported delaying future investment / development / marketing , while continuing their core business
– KSE status “stay” – Companies that ignore exit / downsizing requirements in Russia, as well as companies that have officially stated that they remain in Russia or news of their exit have not been found
– KSE status “exited” – Companies that sold its business/assets or its part of the business to a local partner and leaved the market

²  When we analyze # of local companies, # of staff and local financials (such as revenue, capital, assets, taxes paid) – KSE Institute uses data according to Russian Accounting Standards (or RAS) from the official EGRUL register, all steps how we do it are explained in detail in the Methodology we published here. The key source for local financials is data from the Federal Tax Service of Russia. The latest available consolidated data for each group’s largest Russian units reported in line with local accounting standards excluding intragroup eliminations and other IFRS or GAAP adjustments. More details are available here.

³ On 24 July 2022, we introduced the new status “exited”, which reflects the companies’ actions to finalise the exit from the Russian market. The status relies on data from the Uniform State Register of Legal Entities in Russia (USRLE or EGRUL) and complementary analysis such as companies’ announcements and media publications of company activities. At the same time, companies’ activities can be hard to track and can be missed in the analysis, especially for companies less covered in the media. We encourage our readers to inform us if they are familiar with the companies’ actions that contradict their announcements about the exit via the Feedback Form at https://leave-russia.org/

⁴ After 21 months of war started by Russia in Ukraine we assume that there was quite enough time to make the decision to leave the country-aggressor for all international business. That’s why for KSE Institute companies marked with statuses “stay” and “wait” essentially there are no significant differences.

⁵ Increase in assets vs previous data is explained by adding newly collected information on the bank’s assets which was not available before, as well as the addition of several new companies from the TOP-50 largest foreign companies rating by Forbes Russia.

⁶ https://www.isdp.eu/publication/sanctions-in-japan-russia-economic-relations-impact-and-adaption/

⁷ https://oec.world/en/profile/bilateral-country/jpn/partner/rus

⁸ https://tass.ru/ekonomika/18526041

⁹ https://fishnews.ru/news/47197

¹⁰ https://portnews.ru/news/348750/

¹¹ https://tass.ru/ekonomika/12293433

¹² https://www.moscowtimes.ru/2023/10/19/yaponskoe-embargo-ostavilo-dalnii-vostok-pochti-bez-mashin-a110489/

¹³ https://interfax.com.ua/news/economic/930582.html

¹⁴ A “Company news” section is available on the project site https://leave-russia.org/, follow daily updates directly on the website