Russia places Japan Tobacco International's Russian operations under state control

Russian President Vladimir Putin has placed Japan Tobacco International's operations in Russia under state control, ordering their transfer by decree to a state-linked holding company. The move affects one of the country's largest cigarette producers and covers factories in St Petersburg, Rostov-on-Don, the Lipetsk region and the Leningrad region. It marks a significant seizure of foreign corporate assets in Russia at a time of continuing tensions with countries that have imposed sanctions over the war in Ukraine.

The decree transfers the business to AO Promyshlennye aktivy, according to the supporting material. JTI employs around 4,000 people in Russia and holds roughly 40% of the Russian cigarette market, making it the country's largest manufacturer. Its Russian product range includes international brands Winston, Glamour, Camel, LD and Sobranie, as well as domestic labels Pyotr I, Russky Stil and Donskoi Tabak.

JTI, whose headquarters are in Geneva, entered the Russian market in 1999 and acquired local producer Donskoi Tabak in 2018. The company has invested $4.6bn in its Russian operations over more than 20 years, according to a company profile updated in November 2025. After Russia's full-scale invasion of Ukraine in 2022, it did not leave the country, but it suspended new investment in Russian production and marketing.

The seizure is part of a wider pattern in which Moscow has placed assets of foreign companies under external management after the 2022 invasion. The supporting material says similar transfers have affected European companies including Nestlé, Auchan, Leroy Merlin and Metro. Russia has presented the mechanism as a response to sanctions imposed by states it considers unfriendly, while also using it to restrict dividend payments and keep profits inside the country.

The move also comes amid broader political friction between Russia and Japan. The supporting material notes that Russia arrested Japanese journalist Yuki Imai last month on espionage charges, which Moscow linked to accusations that Tokyo uses journalists to gather intelligence. Japan has rejected that claim and has also joined some Western sanctions over the war in Ukraine.

The two countries also have a long-standing territorial dispute over the Chishima Islands in the Pacific Ocean. What remains unclear is how quickly the transfer will be implemented and what immediate changes, if any, will follow for staff, production and distribution. The supporting material does not say whether JTI will challenge the decree or whether compensation is being discussed.

The case will be watched as another test of how far Russia is prepared to extend state control over foreign-owned businesses during the war and under sanctions pressure.

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