Russia needs foreign investment for development, but “investors will not come if they believe that their employees here can be prosecuted for the implementation of foreign sanctions,” German Gref, CEO of Russia’s largest Sberbank and the former economy minister told Reuters on Wednesday.
The law that sets forth criminal liability for the enforcement of sanctions against Russia in the event of its adoption will force foreign investors to sell of Russian assets and pull. Gref said.
“I fear that [foreign investors] , in a choice between coming under American sanctions or writing off their Russian investments, will choose the second option,” he said.
Russia badly needs foreign investment for development, but “investors will not come if they believe that their employees here can be prosecuted for obeying foreign sanctions,” Gref said. “We will not force them to supply services, goods to our businesses,” he said. Thus, the law on criminal liability for compliance with sanctions will cause additional damage to the Russian economy, Gref concluded.
The bill passed in the first reading provides for a prison sentence of up to four years and a fine of up to 600,000 rubles for the implementation of sanctions against Russia (for example, for refusing to work with sanctions companies), and up to three years and half a million rubles for actions that led to the imposition of new sanctions (for example, the transfer of information).
Russia’s lower chamber State Duma postponed the examination of the second reading of the bill after the criticism of the legislation by the Russian Union of Industrialists and Entrepreneurs, which includes the largest Russian businessmen and managers.
One of the authors of the bill, Duma Speaker Vyacheslav Volodin said it was the decided to discuss bill was with the business community.
Meanwhile, President Vladimir Putin said he sees no obstacles to the adoption of the bill. “Far as we know, there is such a law in Europe. Our colleagues from Brussels want to activate this law to protect interests from so-called cross-border sanctions by the US. I do not see anything unusual if Russia adopts a similar law,” Putin said.
Last week, the European Commission launched a process of blocking US sanctions against Iran to allow European businesses to continue working in that country.