Kremlin’s Controversial Plan: Seized U.S. Food Company to Supply Russian Military Needs

The Kremlin is planning to use Glavproduct, a U.S.-owned canned goods company it seized in October 2024, to supply food to Russia’s military, according to a report from Reuters on April 17. This company, founded by Leonid Smirnov from Los Angeles, is the only American-owned firm under Russian state control following the conflict in Ukraine.

Internal documents reveal that Glavproduct’s new management wrote to the Russian Prosecutor General’s Office, emphasizing the need for steady production to meet the Defense Ministry’s and National Guard’s requirements. Rosimushchestvo, Russia’s property management agency, has also appointed a new CEO from Druzhba Narodov, a food supplier with connections to Russian security forces. Previously, Druzhba Narodov exclusively supplied the Russian National Guard from 2019 to 2020.

Smirnov faces accusations of illegally moving $17 million out of Russia and is contesting the seizure, labeling it a "Russian-style corporate raid." The Moscow Arbitration Court has frozen Glavproduct’s assets, with a court hearing set for April 18.

The situation reflects broader trends in how Russia has handled foreign businesses since the onset of the war. Since 2023, several foreign companies, including Carlsberg and Fortum, have seen their Russian subsidiaries taken over by the state. In May 2024, President Vladimir Putin signed a law allowing the Kremlin to seize U.S.-owned assets as "compensation" for Western sanctions.

This trend indicates Russia’s increasing control over strategic industries, especially food production, to support its military efforts. With military spending on the rise as the war enters its fourth year, Glavproduct’s seizure is part of a larger strategy to fortify supply lines for the Russian military.

Moreover, it’s essential to consider the international landscape as the U.S. and Russia engage in backchannel talks regarding the war. U.S. Secretary of State Marco Rubio mentioned that the fate of Glavproduct might influence efforts to "reset relations" between the two nations.

As tensions persist, the public response remains mixed. On social media, the term "corporate raid" has drawn attention, sparking discussions about corporate ethics and international business practices during conflicts. This case exemplifies the complex interplay between geopolitics and business interests amid ongoing war conditions.

For further insights into the situation, you can refer to articles on sites like Reuters that delve deeper into these developments.

Source link