Russian President Vladimir Putin has signed a decree placing the Russian operations of Japan Tobacco International (JTI) under temporary state control, the latest in a series of seizures targeting foreign businesses in the country. The order, issued on Thursday, transfers JTI's local assets to AO Promyshlennye aktivy, a holding company linked to the Russian state.
The decree covers JTI's four factories in St Petersburg, Rostov-on-Don, the Lipetsk region and the Leningrad region. The company, which employs around 4,000 people in Russia, controls roughly 40% of the Russian cigarette market, making it the country's largest tobacco manufacturer. Its portfolio includes international brands such as Winston, Camel, LD and Sobranie, as well as domestic labels like Pyotr I, Russky Stil and Donskoi Tabak.
JTI, headquartered in Geneva, first entered the Russian market in 1999 and acquired local producer Donskoi Tabak in 2018. According to a company profile updated in November 2025, the JT Group has invested $4.6 billion in its Russian operations over more than two decades. After Russia's full-scale invasion of Ukraine in 2022, JTI did not leave the country but suspended new investment in production and marketing.
Growing list of seized assets
The seizure places JTI alongside other European companies whose Russian assets have been transferred to state management under the same mechanism. These include Swiss food group Nestlé, French retailers Auchan and Leroy Merlin, and German retailer Metro. Moscow has presented the external management process as a response to Western sanctions imposed after the 2022 invasion.
Restrictions introduced for companies from countries deemed "unfriendly" include caps on dividend payments, which trap profits inside Russia, and substantial fees on any sale of Russian business assets. Putin said on 1 October that the mechanism also gives Russia the ability to prepare retaliatory measures against any possible future nationalisation of Russian assets abroad, while leaving open the possibility of returning control to former owners if "conditions improved".
The move comes amid heightened tensions between Moscow and Tokyo. Last month, Russian authorities arrested Yuki Imai, a journalist with the Japanese newspaper Hokkaido Shimbun, on espionage charges. The Russian Foreign Ministry has accused Japan of systematically using journalists to gather intelligence inside the country, a claim Tokyo has rejected. Japan, which has a long-standing territorial dispute with Russia over the Chishima Islands in the Pacific, has also joined some Western sanctions over the war in Ukraine.
For JTI, the seizure marks a dramatic reversal after more than two decades of investment in Russia. The company had previously navigated the post-2022 environment by halting new investment while continuing to operate, a stance that now appears to have made it a target. The transfer to state control is likely to have significant implications for the Russian cigarette market, where JTI's dominance had made it a key player.
The broader pattern of asset seizures has raised concerns among European businesses still operating in Russia. Many have faced difficult choices between exiting at a loss, staying under restrictive conditions, or risking outright expropriation. The Kremlin's actions have also drawn criticism from Western governments, which view them as further evidence of Russia's disregard for international property rights.
As the war in Ukraine continues, the fate of foreign-owned assets in Russia remains uncertain. The seizure of JTI's operations is a reminder that no company, regardless of its size or longevity in the market, is immune to political decisions in Moscow. For now, the Swiss-based tobacco giant joins a growing list of firms whose Russian ventures have been placed under state control, with little clarity on when or if they will be returned.
