President Vladimir Putin signed a decree on Thursday placing the assets that Japan Tobacco (JT) Group holds in Russia under the temporary management of local companies. JT keeps ownership of the assets, but its control over them is expected to be sharply limited in practice.
The order covers four companies, including the cigarette production subsidiaries JT Group operates in Russia. Asked about the move, JT told the Asahi Shimbun it would "carefully examine the options available going forward."
JT said it would halt new investment after Russia began its invasion of Ukraine in 2022, but it has kept its local operations running. The group's Russian business dates from its 1999 purchase of RJR Nabisco's operations outside the United States, and by 2007 it led the Russian cigarette market, according to the website of a JT overseas subsidiary.
A mechanism built for 'unfriendly' states
Russia introduced the temporary management system in 2023, aimed at companies linked to "unfriendly" countries. In September it was applied to Swiss food giant Nestlé and others.
JT's predecessor was the Japan Monopoly Corporation, and the Japanese government still holds more than a third of the company's shares. That leaves a listed Japanese firm with state shareholders exposed to a mechanism Tokyo did not design and cannot easily reverse.