Japan's government has lodged a formal protest with Russia and demanded the immediate cancellation of a decision to transfer the Russian business of Japan Tobacco International (JTI) to the management of a local company. Tokyo is calling for protection of the legitimate interests of Japanese businesses and citizens.
This was announced on November 6 by Japan's Finance Minister Satsuki Katayama. A similar position was voiced by Economy, Trade and Industry Minister Ryosei Akazawa and Chief Cabinet Secretary Minoru Kikuchi.
The Japanese side has already conveyed a protest to the Russian government through diplomatic channels and demanded an urgent review of the adopted decision.
"We have consistently urged the Russian side to prevent violation of the legitimate interests of Japanese citizens and companies. In connection with this decision, we have already expressed a protest and demanded immediate measures, including its cancellation", Katayama said.
To settle the situation, senior officials from Japan's economy and foreign ministries have arrived in Moscow. Together with the Japanese ambassador, they held talks with the Russian side, during which they demanded cancellation of the asset transfer. In addition, Japan's Foreign Ministry expressed a protest to Russia's ambassador to Tokyo, Nikolai Nozdrёv.
Japan's reaction is tied to Vladimir Putin's decree of November 5. The document provides for the transfer of corporate stakes in four Russian enterprises of Japan Tobacco International to the temporary management of the Russian joint-stock company "Industrial Assets".
According to the Russian newspaper Kommersant, the decree affects the companies "J.T.I. Donskoy Tabak", "J.T.I. Yelets", "Kres Neva" and "Petro". They manage tobacco factories in St. Petersburg and Rostov-on-Don, as well as tobacco raw material processing enterprises in the Lipetsk and Leningrad regions.
Formally, the Kremlin's decision does not entail the transfer of ownership rights to these enterprises to the Russian state. However, the Japanese company effectively loses the ability to independently manage the relevant assets. The decree does not specify the duration of the temporary management.
At the same time, the decision does not apply to all Russian structures of JTI. In particular, the shares of the companies "J.T.I. Russia" and "Pereslavl-Tabak", as well as the business of supplying tobacco heating systems, were not transferred to the new manager.
Japan Tobacco itself reported that they are studying the contents of the Russian decree, assessing possible consequences for the business, and considering further actions. The company emphasized that priority will be given to employees and business partners.
The situation also matters for the Japanese government as a shareholder of Japan Tobacco. According to RBC, the state owns 37.55% of the corporation's shares. Katayama said that the Finance Ministry will coordinate further actions with other government agencies and JT management.
Japan Tobacco remains one of the largest tobacco producers in Russia. According to Kommersant, the combined turnover of the four affected enterprises exceeds 90 billion rubles.
After the start of Russia's full-scale invasion of Ukraine, the company suspended new investments in the Russian business but continued operations in the local market.
Russia introduced the mechanism of temporary management of assets of companies from so-called unfriendly countries in 2023 in response to international sanctions. Since then, assets of a number of other foreign enterprises have been subjected to similar decisions.
The Japanese government has not yet announced what additional measures it may take if Moscow refuses to cancel the decree. Tokyo said it will continue to monitor the situation and protect the interests of Japanese companies.
Materials from: TBS News DIG, Jigyo Koso, FNN Prime Online
