Russia Places Japan Tobacco International Assets Under State Control via Presidential Decree

Russian President Vladimir Putin signed a decree on Thursday transferring the Russian operations of Japan Tobacco International (JTI) to state-linked holding company AO Promyshlennye Aktivy, placing the cigarette manufacturer under external management.

The order encompasses JTI’s production facilities in St. Petersburg, Rostov-on-Don, and the Lipetsk and Leningrad regions. The subsidiary employs approximately 4,000 people and commands roughly 40% of the Russian cigarette market, ranking as the country’s largest tobacco producer.

JTI’s Russian portfolio includes global brands such as Winston, Camel, Glamour, LD, and Sobranie, alongside domestic labels Pyotr I, Russky Stil, and Donskoi Tabak. The Geneva-headquartered group entered the Russian market in 1999 and acquired Donskoi Tabak in 2018, investing $4.6 billion over more than two decades according to company figures updated in November 2025.

Following the 2022 invasion of Ukraine, JTI suspended new investment in Russian production and marketing but maintained its operations. The seizure comes weeks after Russian authorities arrested Yuki Imai, a journalist with Japan’s Hokkaido Shimbun, on espionage charges—a move Tokyo has denounced. Japan has also joined Western sanctions over the war and maintains a longstanding territorial dispute with Russia over the Chishima Islands.

JTI joins a growing list of foreign companies—including Nestlé, Auchan, Leroy Merlin, and Metro—whose Russian assets have been transferred to state management under legislation Moscow frames as a response to Western sanctions. Those measures include caps on dividend payments that trap profits in Russia and steep fees on asset sales by companies from “unfriendly” jurisdictions.

Putin stated in October that the mechanism also positions Russia to retaliate against any future nationalization of Russian assets abroad, while leaving open the possibility of returning control to original owners if “conditions improve.” External management effectively transfers operational control to state-appointed administrators without the foreign owner’s consent or compensation, irrespective of nominal ownership.

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