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After the fall of communism, Russia ushered in capitalism by selling off billions of dollars in state assets.
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Now, 30 years later, the Russian government is stepping up a wartime campaign to do the opposite: seizing private businesses, this time in the name of national security.
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In the past month, courts have ordered Russia��s largest warehouse owner to be taken over by the state and also directed the nationalization of a major grain exporter. And in the most stunning case, prosecutors filed a lawsuit in January to seize Moscow��s second-largest airport.
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The new spate of expropriation expands on the seizures of Western-owned businesses in Russia after President Vladimir Putin��s invasion of Ukraine began three years ago.
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Critics say the asset seizures are also undermining the last vestiges of Russia��s rule of law. They have become ��chaotic�� and ��out of control,�� said Alexandra Prokopenko, a fellow at the Carnegie Russia Eurasia Center in Berlin.
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By seizing lucrative private enterprises, the Kremlin can put large sections of the economy either in state hands or under indirect control of Putin��s associates, allowing the government to tailor industrial output to the needs of the war effort and also be in a position to introduce price controls. It also aligns with the Russian leader��s goal of tightening his grip on domestic policy.
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Researchers at the London School of Economics have identified more than 200 Russian court rulings to nationalize private companies since the start of the invasion of Ukraine in 2022. The courts, they said, mostly used claims that the companies violated 1990s privatization laws to seize them from businesses deemed ��unfriendly to the Kremlin regime.��
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Taken together, those seizures amount to ��the largest redistribution of property in Russia since the privatization drive�� in the 1990s, said Alexander Kolyandr, a fellow at the Center for European Policy Analysis.
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Putin spearheaded a campaign to take over landmark assets from foreign owners in the first months of the war. He signed several decrees in 2022 and 2023, first barring the foreign owners from selling their assets, then allowing the state to ��temporarily take over�� Russian companies owned by individuals from ��hostile nations.�� But he has since taken a back seat as property seizures became widespread across different sectors of the economy.
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