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Ukraine’s leadership is expected to ask Congress to ban corporations paying taxes in Russia from the U.S. stock market

‘The taxes that these companies pay in Russia finance bombs that kill our military and innocent civilians,’ states a letter from a Zelensky ally

Ukrainians flee the area of Irpin at a damaged bridge on the outskirts of Kyiv on March 7. (Heidi Levine for The Washington Post)
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A senior member of Ukraine’s government is expected to ask members of Congress to impose stiff new penalties on all corporations that pay taxes in Russia, according to a copy of the letter to lawmakers obtained by The Washington Post.

Davyd Arakhamia, the parliamentary leader of Ukrainian President Volodymyr Zelensky’s political party, is sending a letter to Congress asking lawmakers to delist from the U.S. stock exchange all corporations that pay taxes in Russia. The letter also asks the U.S. government to freeze the assets of all Russian oligarchs on the Forbes 100 list if they did not denounce Russian President Vladimir Putin within 48 hours.

Western businesses’ flight from Russia continues with Shell, GM and others ending or suspending dealings

Both steps would represent dramatic escalations in America’s economic countermeasures against Moscow, undertaken against Russia over its invasion of Ukraine. Dozens of firms on the U.S. stock exchange retain operations in Russia — though many have pulled out over the past week — and pay billions of dollars to Russia’s government in taxes, according to Maryan Zablotskyy, a member of the Ukrainian parliament’s finance committee who spearheaded the effort.

“The taxes that these companies pay in Russia finance bombs that kill our military and innocent civilians, including children,” states the letter by Arakhamia, who is also the chairman of the U.S.-Ukraine caucus. “We ask you to consider action of giving these companies a choice: stop paying money to [the] Russian government, or get delisted from the U.S. stock market.”

The letter reflects the Ukrainian government’s attempts to push the United States and its Western allies to hit Russia harder in response to its invasion. The Biden administration has implemented unprecedented sanctions on Russia, targeting Moscow’s central bank and imposing sanctions on dozens of oligarchs close to Putin.

Numerous Western businesses have pulled out of Russia since the Ukraine invasion, including General Motors, Shell and accounting firms PwC and KPMG. But many others, including fast-food restaurants and other bricks-and-mortar retailers, have not. Zablotskyy pointed to the ongoing Russian operations of McDonald’s, PepsiCo and Mondelez International, among other companies. Those firms did not immediately reply to a request for comment.

Any effort to delist companies paying taxes in Russia could face logistical hurdles. Paul Massaro, an anticorruption adviser to congressional lawmakers, said the firms that are left in Russia will already face increasing pressure to leave as the war continues. U.S. sanctions on Russian banks also make it increasingly hard for companies to integrate their Russian branches with their international operations.

“The combination is both the pressure from a morality perspective, to avoid being seen as supporting [Russia], but also the sanctions make it really hard to do business,” Massaro said.

U.S. targets Russian oligarchs with sanctions

Dean Baker, a liberal economist at the Center for Economic and Policy Research, said U.S. lawmakers may be wary of setting the precedent of companies not paying the taxes they owe as a potential means of punishment.

“I think that would be a really hard one to do,” Baker said. “It’s probably not the route — I’m guessing here, but there’s probably a lot of legal obstacles.”

But Maria Mezentseva, a member of the Ukrainian parliament, said in an interview that she is backing the letter as the number of casualties in her country grows and the Russians have attacked children’s hospitals and other civilian infrastructure.

“Our pain is enormous; we are losing people every day. … We’re facing a humanitarian catastrophe,” Mezentseva said. “This will obviously touch upon Russia and taxpayers and the Russian regime in general.”