Pekka Kallioniemi Profile picture
Feb 17, 2023 19 tweets 8 min read Read on X
In today's #vatnik soup I'll talk about sanctions and business in Russia. Most of the data and discussion points come from recently published work titled "Less than Nine Percent of Western Firms Have Divested from Russia" by Evenett & Pisani.

1/17
In my previous soup, I have written how the Western sanctions are circumvented in Russia. The most common method for this is using third party countries for importing products. Especially Eurasian countries such as Kazakhstan are common import points for Western products.

2/17
Russia has also made "parallel import" legal, which means that almost any product can be imported to Russia without the permission of the trademark owner. The problem with this is that these products have no guarantee.

3/17
But most companies don't even have to resort to this type of tactics - they simply continued business in Russia as usual. The study looked at around 1400 companies whose headquarters are located in the G7 or in the EU. Out of these, only 8,5% have actually left Russia.

4/17
One of the authors, Evenett, commented that this type of voluntary actions to leave a market often work poorly, and that similar results were observed in South Africa during the apartheid. The sole purpose of many companies is to make money without moral judgment.
5/17
Also, Putin's regime hasn't made the leaving easy. If the company wants to sell their production lines, factories, warehouses, etc., they'll have to find a buyer who's prepared to pay a high enough price.

6/17
The time span for this payment can range from one to two years, and the Russian government can also obstruct these sales or even prevent transfer of proceeds abroad, making these deals extremely challenging and time-consuming.

7/17
But many companies have probably decided to stay simply out of greed: when most of your competitors leave the market, business can be extremely lucrative. These companies and their owners don't care about filling the Russian war coffin, they just want to make an easy buck.

8/17
Some well-known companies that are continuing business-as-usual in Russia are Benetton (Italy), Clarins (France), Lacoste (France), Match Group (US), Raiffeisen Bank International (Austria) and Liebherr (Switzerland).

9/17
Many companies, like the Austrian Red Bull GmbH, have also "suspended new investments" in Russia, which for most consumer products means business-as-usual, as they didn't even have any production capabilities in Russia and are focusing solely on the wholesale market.

10/17
Yale University has published similar studies, and they have a website where people can check whether a company still has activity in Russia. They use a categorization of four distinct categories: "stay," "wait," "leave," and "exited".
som.yale.edu/story/2022/ove…

11/17
Some countries that have over representation among the companies that remained, include Germany, Italy and Cyprus. 250 German companies remain in Russia. For the Cypriot companies, this number is 211, for the US 159, for Japan 90 and for Italy 81.

12/17
Only 14 German and 9 French companies have exited the Russian market. A total of 15 companies from Finland have left Russia, and most of the rest are in the process of leaving, but Russian authorities are making this exceedingly difficult.

13/17
Finland has also stopped admitting tourist visas to Russians, which has led to an interesting scheme that involves Norway and the Schengen agreement. Groups of cars from Russia arrive to Näätämö, Northern Finland via the Storskog border station in Norway to buy tax-free...

14/17
... groceries and so-called luxury products from Finland. The Schengen agreement allows them to come from Norway to Finland freely. One of the local stores in Näätämö stopped selling products tax-free already in Spring, 2022, but another store sells them as usual.

15/17
The store owner has stated that the responsibility falls on the state, not on him. Since these tax free purchases can't exceed 300 EUR, the Russians have recruited "babushka mules" ("kilomummo" in Finnish) to cross the border and buy more products for them.

16/17
These "babushkas" also get around 20 EUR shopping money for themselves. The most commonly bought products are chocolate, cheese, coffee, children's clothing, vitamins and Kuoma winter boots. These products are then often sold online or in stores for a hefty profit.

17/17
Addendum: Japan has also sanctioned Russia, as has Kosovo.

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More from @P_Kallioniemi

Mar 28
In today’s Vatnik Soup, I’ll introduce a podcaster and conspiracy theorist, Joe Rogan (@joerogan). He’s best-known for launching the biggest podcast in the world, promoting various conspiracy theories, his support for Donald Trump and his anti-Ukraine rhetoric.

1/22 Image
Joe Rogan started as a stand-up comedian in the 1980s, found fame on NewsRadio, and became a household name with Fear Factor. But his biggest impact came in 2009 when he launched The Joe Rogan Experience (JRE), one of the first major podcasts.

2/22 Image
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JRE started as casual but deep conversations, often covering countercultural topics like psychedelics, MMA & hunting. Joe’s podcasting style is largely non-confrontational, often allowing his guests to share their views without significant pushback or critical questioning.

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Read 23 tweets
Mar 27
In today’s Vatnik Soup, I’ll introduce KOOS party leader and Estonian crypto businessman Oleg Ivanov. He’s best known for running shady businesses, spreading Russian false narratives in Estonia, and participating in the pro-Kremlin political party KOOS.

1/18 Image
As a talented youngster, Oleg learned Estonian almost flawlessly, was a promising karate athlete, and landed a job at a law firm at just 20. He caught the eye of Estonian fuel entrepreneur Endel Siff, who quickly took him under his wing.

2/18 Image
Oleg’s father, Vladimir Ivanov, was a longtime politician from the Russian-funded United People’s Party of Estonia. His career at the town hall ended abruptly when he was caught drunk at work. After that, he went into business with his son, Oleg.

3/18 Image
Read 19 tweets
Mar 26
In today’s Vatnik Soup, I’ll talk about the takeover of social media by illiberal, populist influencers. For the last ten years, social media has been dominated by these voices and it is one of the main reasons for the political rise of people like Trump and Orban.

1/25 Image
“Illiberal populists” like Trump reject democratic norms while claiming to speak for “the people.” They centralize power, attack institutions, and push nationalism over rights. Elections exist, but checks & balances erode. This is democracy in name, autocracy in action.

2/25 Image
The media landscape has changed drastically over the past two decades. The Internet and social media have changed how we interact online & how we consume media,but it has also become our main source of news. In many ways,social media companies have control over information.

3/25 Image
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Read 26 tweets
Mar 25
Ladies and gents, it's time for some "Houthi PC small group" memes!

I'll start with my favorites, post yours below 👊🇺🇸🔥 Image
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Read 7 tweets
Mar 24
In today’s Vatnik Soup, I’ll introduce Lithuanian far-right politician and Seimas member Remigijus Žemaitaitis. He’s best known for his extremist political views and for falling for a scam that convinced him he was flying to New York to meet Elon Musk.

1/17 Image
Like many vatniks before him, Remigijus worked as a lawyer before entering the world of politics. Once just another politician, he gradually embraced far-right nationalism and populism, following a trend seen across Europe over the past 15 years.

2/17 Image
Instead of real policies, he tapped into fear, resentment, and anger, turning 4chan talking points into a populist political strategy. His speeches became more extreme, targeting minorities, Western institutions, and Lithuania’s support for Ukraine.

3/17 Image
Read 18 tweets
Mar 20
In today’s Vatnik Soup, I’ll introduce an Estonian businessman turned far-right politician and conspiracy theorist, Harry Raudvere. Raudvere is best-known for his neo-Nazi and pro-Kremlin politics, for his lingerie businesses, and for spreading anti-Estonia propaganda.

1/17 Image
Raudvere started building a business empire in the 2000s, and a lot of his wealth comes from wind farms in Ida-Virumaa in Estonia. His family also owns a lingerie business, BonBon Lingerie. As tacky lingerie is popular in Russia, they were very active there before the war.

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Raudvere promotes ideas that strongly resemble Russian propaganda talking points, and has no problem in undermining Estonia’s support for Ukraine. But at the same time, he is strongly aligned with far-right nationalist movements.

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Read 18 tweets

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