Firms that exited were mostly smaller or businesses whose products were hit by sanctions, according to a local chamber of commerce head

Only 30% of Italian companies have exited the Russian market over the past three years, while the majority continued operating in the country, according to the head of the Italian-Russian Chamber of Commerce.

US, European, and Asian companies pulled out of Russia due to supply problems caused by unprecedented sanctions the West imposed on Moscow after the escalation of the Ukraine conflict in 2022. Other firms left due to the risk of facing secondary sanctions or public relations pressure.

It was very difficult to make quick decisions at the time, and many Italian companies tried to delay rather than act, chamber president Vincenzo Trani said in an interview with Russian business daily RBK published on Wednesday.

"In the end, around 30% of our companies left the Russian market, while 70% stayed," he noted.

Trani explained that the companies that chose to leave were typically smaller players, state-owned enterprises, or firms whose products were directly affected by Western sanctions. These companies faced sharp losses, he said, adding however that those who "chose to stay and wait for better conditions are unfortunately still struggling."

Unlike German and French firms, Italian companies withdrew under less favorable conditions. Many major German corporations had invested in Russia under the Hermes insurance scheme, a state-backed program that covers commercial risk in the Commonwealth of Independent States.

"Volkswagen, Mercedes, BMW didn't walk away empty-handed," Trani said. They received compensation upon withdrawal, while Italian businesses were left to absorb the losses themselves, he explained.

Italian exports to Russia have fallen from €8-9 billion ($9-10.2 billion) a year to around €4 billion, halving trade volumes at a time when exports to the US are being hit with customs duties.

"Italians have always felt quite comfortable doing business in Russia and never truly believed the risks would materialize," Trani told the outlet.

"Only one Italian company, Ariston, was affected by external administration measures - but even that case was resolved, and ownership was eventually restored." The household appliance manufacturer announced its return to Russia in March.

In recent months, foreign companies that had left Russia have begun to register new trademarks in the country, signaling their potential return. Among them are McDonald's, Hyundai, Intel, Microsoft, LG, IKEA, Chanel, Rolex, and Louis Vuitton, according to data from the Russian patent office, Rospatent.

In March, Russian President Vladimir Putin ordered the government to draft regulations for Western firms seeking to return to the country's market, that would prioritize the adequate protection of local businesses.

Earlier this month, the president said companies that "insulted" Russia should be barred from re-entering. He said that Russia would act pragmatically, evaluating the pros and cons to its economy in each case.

(RT.com)