Russia
   Countries on the "Unfriendly countries list"

The unfriendly countries list (Russian: Список недружественных стран, romanized: Spisok nedruzhestvennykh stran) is a list of countries published by the Russian government that it says "commit unfriendly actions against Russia, Russian companies and citizens".[1] Countries added to the list are subject to certain restrictions related to their relationships with Russia, including trade and currency restrictions and personnel limits in the listed countries' diplomatic missions in Russia.

The list was first published in May 2021 where it consisted of the United States and the Czech Republic. Following the start of the Russian invasion of Ukraine on 24 February 2022 and international sanctions imposed against Russia, the list has since been expanded to 49 states.[1] All G7 member states and all 27 European Union member states are on the list. Turkey is currently the only NATO member to not be on the list.

List of countries and regions

Estonia was put on the list in April 2021, the Czech Republic and the United States were added in May 2021,[2] while the rest of the countries on the list were added from March 2022 onwards.[3]

Background

In June 2018, Russian President Vladimir Putin signed a law empowering the government to introduce countermeasures against countries determined to have engaged in "unfriendly" actions against Russia. The countermeasures listed included import and export restrictions, suspension or termination of international cooperation, or privatization of state assets.[5] An announcement on the passage of the legislation published by Russian state media specifically named the United States as the law's target.[5]

In April 2021, Russian foreign ministry spokeswoman Maria Zakharova announced that Russia would be publishing an "unfriendly countries list" that included the United States.[6] Early drafts of the list were leaked and included up to ten countries,[7] but the final list issued by Russia only contained two: the United States and the Czech Republic.[2] In publishing the list, the Russian government restricted the Czech embassy in Russia to hiring no more than 19 Russian nationals, and prohibiting the U.S. embassy in Russia from hiring any local employees.[8]

Russia's relations with both countries were at a low point at the time. The United States and Russia had recently expelled each other's diplomats and the United States imposed sanctions against Russia in retaliation to claimed Russian cyberattacks and interference in American elections. Similarly, the Czech Republic accused Russian intelligence officers of being behind two ammunition warehouse explosions inside the country in 2014.[8]

List expansion

In February 2022, after Russia launched a full scale invasion of neighboring Ukraine,[9] numerous countries around the world began instituting economic sanctions against Russia in retaliation for the invasion with a goal of crippling the Russian economy,[10] in addition to Micronesia's decision to sever diplomatic relations with Russia. In response, Russia expanded the unfriendly countries list to include 48 countries around the world that had imposed the sanctions or severed diplomatic relations.[3]

On 22 July 2022, Russia added Croatia, Denmark, Greece, Slovakia and Slovenia individually to the list, separate from the European Union.[11] Russian Prime Minister Mikhail Mishustin stated that the list is now made up of countries that "adopted actions that are unfriendly toward Russia and particularly against Russia's diplomatic and consular representations abroad."[11] The Danish embassy in Russia has been limited to 20 staff, the Greek embassy to 34 and the Slovak embassy to 16. Additionally, the Croatian and Slovene embassies "will not be able to hire employees in their diplomatic missions and consular offices".[11]

On 24 July 2022, Russia added the Bahamas, as well as the British Crown Dependencies of Guernsey and the Isle of Man to the list.[1]

On 30 October 2022, Russia added 11 British territories to unfriendly countries list. The Russian Cabinet's website said, "Eleven more British Overseas Territories have been added to the list that supported the sanctions imposed by the UK on Russia. These are: Bermuda, British Antarctic Territory, British Indian Ocean Territory, Cayman Islands, Falkland Islands, Montserrat, Pitcairn Islands, St. Helena, Ascension and Tristan da Cunha Islands, South Georgia and the South Sandwich Islands, Akrotiri and Dhekelia, Turks and Caicos Islands." Along with three British-controlled territories – the island of Anguilla, the British Virgin Islands and Gibraltar – this amounted to all 14 British Overseas Territories being included on the list.[12]

Hungary was added to the list in March 2023 and Norway in August 2023.[13]

Restrictions against listed countries and regions

The legal basis for instituting sanctions against countries deemed "unfriendly" to Russia was initially passed in June 2018 with a menu of available countermeasures, including import and export restrictions, suspension or termination of international cooperation, or privatization of state assets, but no specific targets were listed.[5] When the United States and the Czech Republic were added to the list in April 2021, Russia restricted the numbers of local employees that could be hired by the two countries' diplomatic missions in Russia.[8] The Czech Republic's embassy could only hire 19 Russian employees, while the United States embassy could not hire any.[8]

In March 2022, in retaliation to sanctions imposed against Russia in response to their invasion of Ukraine, Russia added an additional 48 countries that had imposed sanctions against it to the unfriendly countries list. Creditors from countries on the list who sought to receive payments on the debt were required to open a special bank account at a Russian bank to receive payments in Russia's currency, rubles, rather than another international currency.[14] In addition, all new corporate deals between Russian companies and entities in countries on the unfriendly countries list had to seek approval from a government commission.[14]

Putin announced several weeks later that Russia would only accept the ruble as payment for Russia's natural gas exports to countries on the unfriendly countries list.[15] As a result of the freezing of Russian Central Bank foreign reserves in euro and dollars by the unfriendly countries, in addition to the SWIFT ban on dollar and euro transfers to or from a large portion of the Russian banking sector, Russia no longer considered payment in dollars and euro via foreign accounts viable. Russian Gazprombank and Rosneftbank were spared from the SWIFT sanctions to allow payments for Russian gas and oil to be processed to Gazprom and Rosneft. However Russia still faced a risk that dollar or euro energy payments stored in these banks might also be frozen there in a future SWIFT ban extension. With the requirement to pay in rubles this is forestalled. Putin said that as a result, it "made no sense" to receive payments in other currencies.[16] In addition the international sanctions against Russia caused the value of the ruble to plummet.[17] The European Union, which was added to the list, relied on Russia for 40% of its natural gas imports, and forcing payments in rubles could help to inflate the demand for and value of the currency.[16]

Russian President Vladimir Putin signed a decree introducing visa restrictions for citizens from "unfriendly countries," a decision made in retaliation to hostile measures taken by the European Union, the Kremlin said on 4 April 2022. According to the decree, Russia will partially suspend its simplified visa agreements with EU member countries along with Norway, Iceland, Switzerland and Liechtenstein. The Kremlin said that the decree also ordered the country's foreign ministry to impose individual entry restrictions on foreigners and stateless persons who commit hostile acts against Russia, its citizens or legal entities.[18]

Russia banned the export of inert gases including neon and helium to "unfriendly countries" on 31 May 2022. This was a counter sanction which followed a ban on electronics exports to Russia.[19]

On 5 September 2022, Russia terminated the agreement with Japan on facilitated visits to the Kuril Islands by Japanese citizens, former residents of these islands.[20]

In June 2023 Russia banned journalists from unfriendly countries from attending Russia's economic forum. Many foreign journalists have already left Russia for safety reasons.[21]

Financial penalties imposed over people and businesses from the unfriendly countries list

In March 2022, Russia adopted a law to allow local businesses to provide zero compensation to patent owners from unfriendly countries. Decree number 299 modified intellectual property laws in Russia. Countries on the unfriendly countries list would not receive reciprocity for copyrighted goods.[22]

In March 2023, Russia announced that people from unfriendly countries will be subject to a "voluntary" exit tax of up to 10 percent to be paid into the Russian federal budget, on the sale of shares in Russian companies.[23] This was expanded in July 2023 so that companies leaving Russia must sell their assets to Russian buyers at a 50% discount. The decree also bans including buyback options.[24]

August 2023 saw Russia pass a decree barring foreign investors from unfriendly countries from holding investments in major Russian businesses. The businesses were not specified but would include important banks and firms above a specific size when considering revenue, assets employees, or taxes paid. This means that shares can be taken from overseas investors and given to Russian investors.[25]

August 2023 also saw Russia pass a decree (No 585) to partially suspend certain sections of double tax treaties (DTT) with unfriendly countries which results in standard withholding taxes applying, 15% on dividends, and 20% on interest payments, royalties and non dividend profit distributions. Some double taxation will also now occur. The unilateral decree was made in breach of the terms of the DTT's and the Vienna Convention on the Law of Treaties. A non Russian business who maintains an establishment in Russia risks being taxed by Russia as well as its home country due to the suspension of the DTT's.[26]

See also

References

  1. 1 2 3 "Russia adds Bahamas, Guernsey, Isle of Man to list of unfriendly countries and territories". Tass. 24 July 2022. Retrieved 24 July 2022.
  2. 1 2 "Russian government approves list of unfriendly countries". Russian News Agency TASS. 14 May 2021.
  3. 1 2 "Russian government approves list of unfriendly countries and territories". Russian News Agency TASS. 7 March 2022.
  4. ↑ Cole, Brendan (30 March 2023). "Putin Turns on His Former Ally as He Brands Hungary 'Unfriendly Nation'". Newsweek. Retrieved 2 April 2023.
  5. 1 2 3 "Putin signs law on countersanctions against unfriendly states". Russian News Agency TASS. 4 June 2018.
  6. ↑ "Russia Puts U.S. Top of 'Unfriendly Countries' List". Newsweek. 27 April 2021.
  7. ↑ "Russia includes Baltic states in its list of unfriendly nations - newspaper". Baltic Times. 28 April 2021.
  8. 1 2 3 4 "Russia lists US, Czech Republic as 'unfriendly states'". France 24. 14 May 2021.
  9. ↑ Parker, Claire (23 February 2022). "What counts as an 'invasion,' or as 'lethal aid'? Here's what some terms from the Russia-Ukraine crisis really mean". The Washington Post. Archived from the original on 23 February 2022. Retrieved 23 February 2022.
  10. ↑ Melander, Ingrid; Gabriela, Baczynska (24 February 2022). "EU targets Russian economy after 'deluded autocrat' Putin invades Ukraine". Reuters. Archived from the original on 26 February 2022. Retrieved 26 February 2022.
  11. 1 2 3 "Greece listed as 'unfriendly country' by Russia in expanded list". Neos Kosmos. 23 July 2022. Retrieved 24 July 2022.
  12. ↑ "Russian government adds 11 British territories to unfriendly countries list". Tass. 30 October 2022. Retrieved 30 October 2022.
  13. ↑ "Russia adds Norway to list of countries 'unfriendly' to its diplomats". 3 August 2023.
  14. 1 2 "Russia issues list of 'unfriendly' countries amid Ukraine crisis". Al Jazeera. 8 March 2022.
  15. ↑ "Putin says 'unfriendly' countries must now pay for Russian natural gas in rubles". The Hill. 23 March 2022.
  16. 1 2 "Putin wants 'unfriendly countries' to pay rubles for gas". Associated Press. 23 March 2022.
  17. ↑ "'It will be a lot harder on people.' How sanctions will impact ordinary Russians". USA Today. 1 March 2022.
  18. ↑ "Putin signs decree on retaliatory visa measures for citizens from "unfriendly countries"". Xinhua net. 22 May 2022.
  19. ↑ "Russia limits exports of noble gases, a key ingredient for making chips".
  20. ↑ "Russia Terminates Agreement With Japan On Facilitated Travel To Kuril Islands". Urdu Point. 5 September 2022.
  21. ↑ "Moscow Bans 'Unfriendly' Journalists From Economic Forum". 5 June 2023.
  22. ↑ "Has Russia legalised intellectual-property theft?". The Economist.
  23. ↑ "Russia to Charge Exit Taxes when Residents from Unfriendly Countries Sell Shares in Russian Companies — Orbitax Tax News & Alerts". 27 March 2023.
  24. ↑ "Russia Tightens Exit Rules for Foreign Businesses – Vedomosti". 14 July 2023.
  25. ↑ "UPDATE 1-Putin signs law on barring 'unfriendly' foreigners from owning stakes in Russian firms - RIA". 4 August 2023.
  26. ↑ "Russia suspends tax treaties with "unfriendly" countries". Retrieved 10 December 2023.
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