Erasing the footprint: how Russian capital threatens Ukraine

The state must regulate the presence of Russian capital in Ukraine before launching the investment screening mechanism, as it poses risks to national security and investment attractiveness. This is stated in an article by the Institute of Legislative Ideas published on Ekonomichna Pravda.

According to the experts, in previous years the assets of the aggressor state were used to gain access to strategic resources and to manufacture products for the needs of Russia’s military-industrial complex. In addition, data from Opendatabot and YouControl show that thousands of companies in Ukraine still maintain ties to Russian business, with their combined revenue in 2024 exceeding UAH 150 billion.

The ILI emphasizes the need to adopt a separate law that would establish a transparent mechanism for cleansing Ukrainian businesses of Russian ownership. Such a law should provide for:

• a ban on new investments from the Russian Federation;
• clear procedures for businesses seeking to eliminate Russian influence;
• a mechanism for the voluntary “cleansing” of Ukrainian enterprises from Russian ownership stakes and the possibility of unblocking the operations of Ukrainian companies;
• the establishment of state management for companies of strategic importance in which Russian capital remains.

At the same time, according to the ILI, the most important aspect will be a clear and transparent procedure for removing Russian capital from ownership structures.

“A person holding such a stake declares it; then the general meeting adopts a decision to buy out this stake at market prices. At the same time, the funds do not go to the Russian owners but remain frozen in special accounts. They will be seized until Russia compensates Ukraine for the damage caused. These changes can be implemented even before the law is adopted,” the ILI experts explained.

They noted that Ukrainian businesses would receive a lawful mechanism to cleanse themselves of Russian ownership, as well as the opportunity to operate without the risk of potential criminal cases and numerous inspections. This would allow companies to fully legalize their operations. At the same time, the state would be able to purchase military bonds using the frozen funds – an approach that is already being applied by ARMA.

The ILI believes that the adoption of a law on cleansing from Russian assets would be not only an economic but also a security decision, enabling the removal of the remaining influence of Russia and preventing its return in the future. The law would ensure a balance between protecting national security, respecting individual rights, and safeguarding the interests of entrepreneurs.