Seven local subsidiaries of the Japan Tobacco (JT) group have been placed under the temporary management of Russian companies by presidential decree, stripping the parent of operating control in retaliation for Japan's sanctions over the invasion of Ukraine, the Kyoto Shimbun reported.
Ownership is said to remain with JT, but management rights have effectively been taken away. The newspaper called the move an unjust use of pressure over sanctions.
European companies from so-called unfriendly countries have already been treated the same way. Since 2023, local units of French, Danish and Swiss food and retail groups have been placed under temporary management one after another. Some were forced to sell their businesses.
JT's Russia business accounts for about 10% of group sales, with related assets reaching ¥1.5 trillion. A prolonged standoff could deal a heavy blow to its operations.
Factories hit in Ukraine
In September and October, factories of a JT subsidiary in Ukraine were attacked by Russian forces. The military claimed the plants were making ammunition, a charge JT completely denies. The allegation may have been fabricated as a pretext for the takeover.
Japan has frozen the assets of Russian government officials and organizations over the invasion. Russia's moves to pressure Japan over those measures are growing more active.
In August, President Vladimir Putin visited the Northern Territories. In October, Russian authorities detained a Hokkaido Shimbun correspondent stationed in Sakhalin on suspicion of spying. A month later he remains in custody without specific charges.
If foreign companies keep pulling out over the risks of operating in Russia, the heaviest damage will fall on Russia's economy and its people, who are struggling with inflation.
Putin must recognize that the fault for the sanctions lies entirely with Russia, which has ignored international law and continued its invasion of Ukraine for four and a half years.
Putin is expected to attend the Asia-Pacific Economic Cooperation (APEC) summit, which opens in China on the 18th.
The Japanese government needs to work with European countries facing the same problems and use every means at its disposal to press Russia to stop its unjust interference in companies and its human rights violations.