Italian Companies Continue to Support Russian War Efforts Despite Sanctions
Italian companies that continue to operate in the Russian Federation are contributing significantly to the Kremlin’s war efforts, despite active EU sanctions. According to data from the Kyiv School of Economics’ Leave Russia project, these companies are paying around €346 million annually, totaling approximately €1.037 billion since the full-scale invasion of Ukraine began.
Andrii Onopriienko, head of the project, states that about half of this money has been used for military spending to finance the war against Ukraine. This highlights a troubling reality where even with international pressure, certain businesses are still able to sustain their operations in Russia.
The Leave Russia Initiative and Its Findings
The Leave Russia initiative was launched to create an online database that tracks the activities of major multinationals still operating in Russia over the past three years. The database categorizes companies based on their country of origin, industry, and current status—whether they are actively conducting business, have suspended operations, or have left the country due to sanctions.
According to data from Russian tax authorities, financial information available online, and press monitoring, 146 Italian companies are still active in Russia. Around thirty of these companies have announced plans to leave the country, while approximately 70 others maintain a legal presence. The rest continue to export goods to Russia.
Leading Countries with Significant Commercial Presence
While Italy is among the European countries with the highest number of active operations in Russia, other nations have a more substantial footprint. Germany leads with 459 companies, followed by the United Kingdom with over 290. The United States maintains an even larger commercial presence, with 810 companies operating in Russia.
Some well-known Italian companies, such as chocolate manufacturer Ferrero, pasta producer Barilla, and women’s hosiery specialist Calzedonia, continue to conduct business in Russia. However, several other major firms, including energy giants Enel and Eni, as well as luxury clothing brand Moncler, have ceased their operations in the country.
Navigating Grey Areas in Trade
Despite the sanctions, many companies continue to operate in Russia through loopholes or indirect trade. Carolina Stefano, professor of Russian history and politics at Luiss University in Rome, explains that there is a “grey area” of trade beyond the data collected. Some companies have exited the market but manage to pass through other channels.
This form of trade places a significant burden on the Russian economy due to increased import costs through third countries or additional taxes. Stefano notes that while companies may continue to do business with Russia, it comes at a high cost.
In some cases, not all products are included in the EU sanctions list, allowing companies to trade with Russia legally. Additionally, the Russian government has introduced measures that increase costs for those who choose to leave the market.
Challenges Faced by Businesses
Many companies feel that they were not consulted before the EU imposed sanctions on Moscow. The rapid pace of European diplomacy has led to a sense of injustice among some businesses, particularly when the priorities of promoting a European initiative have affected individual countries differently.
Impact on the Russian Economy
Alexandra Prokopenko, a former employee of the Russian Central Bank and fellow at the Carnegie Russia Eurasia Centre, argues that import bans are hindering any potential for long-term economic growth. While the goal of these sanctions is to make the consequences of supporting the war clear to Russian consumers, they also have a lasting impact on the country’s economic prospects.
Prokopenko emphasizes that it will be very difficult for Russia to transition from a war economy to a more stable, civilised model. Military and defense spending has doubled from around 4% to 8% of GDP, accounting for 40% of the total state budget. This shift underscores the deepening reliance on military expenditures, further entrenching the country’s war-driven economic structure.