Putin seizes Japan Tobacco's Russian assets amid worsening bilateral ties

Russian President Vladimir Putin signed a decree placing the Russian assets of Japan Tobacco International under temporary state management, appointing Industrial Assets as administrator. The move targets Russia's leading tobacco supplier, which accounts for roughly 40 percent of the market and a quarter of JTI's operating profit. Tokyo lodged strong diplomatic protests, demanding the immediate reversal of the decree. The seizure follows growing diplomatic frictions, including journalist arrests and sanctions, amidst a broader Kremlin campaign expropriating Western corporate assets.

Seizure of Japan Tobacco's Russian assets

• ▪Russian President Vladimir Putin signed a decree, placing four Russian manufacturing subsidiaries of Japan Tobacco International under the temporary management of Russian firm Industrial Assets
• ▪The Russian entity Industrial Assets, registered on September 16, 2026, and owned by former Kursk region FSB officer Sergei Dremov, was designated as the state manager of Japan Tobacco International's Russian entities
• ▪Russia's TASS news agency said Russian President Vladimir Putin's asset seizure order was executed under an April 2023 decree authorizing temporary administration over foreign assets from countries Russia designates as unfriendly
• ▪The asset seizure decree signed on Nov. 5 by Russian President Vladimir Putin directly affected Japan Tobacco International factories located in St. Petersburg, Rostov-on-Don, the Lipetsk region, and the Leningrad region

Japan Tobacco's business footprint in Russia

• ▪Japan Tobacco's Russian business generated roughly 25 percent of the group's operating profit and 10 percent of its total revenue in the previous fiscal year
• ▪Japan Tobacco holds approximately 37 to 40 percent of the Russian cigarette market, employing around 4,000 people in Russia with brands including Winston, Camel, LD, and Sobranie

Japanese diplomatic actions over corporate assets

• ▪Japanese Finance Minister Satsuki Katayama and trade minister Ryosei Akazawa lodged official diplomatic protests demanding that Russia immediately reverse its asset seizure decree
• ▪Japan's government dispatched officials to Moscow in early 2026 to communicate with Russian authorities and attempt to safeguard Japanese corporate assets

Diplomatic and security friction between Japan and Russia

• ▪Russian President Vladimir Putin visited the disputed Kuril Islands in August 2026, drawing a official rebuke from Japanese Prime Minister Sanae Takaichi
• ▪The Russian Foreign Ministry characterized a Japanese company's drone sale to Ukraine in October 2026 as a hostile act and warned of retaliatory measures
• ▪Japan imposed sanctions in October 2026 targeting dozens of Russian individuals, military-industrial companies, and 35 shadow fleet vessels
• ▪Russia's Federal Security Service arrested Japanese journalist Yuki Imai of the Hokkaido Shimbun in October 2026 on espionage charges, which both the Japanese government and his employer denied

International Criminal Court dispute

• ▪Russia tried nine International Criminal Court officials in absentia, demanding the extradition of ICC President Tomoko Akane following the court's arrest warrant for Russian President Vladimir Putin
• ▪The International Criminal Court pursued an arrest warrant for Russian President Vladimir Putin over alleged war crimes in Ukraine

Wider Russian state seizures of foreign assets

• ▪Russia placed the local assets of major European companies including Nestlé, Metro AG, Leroy Merlin, and Auchan under state management in September and October 2026
• ▪Russian President Vladimir Putin defended asset seizures as symmetrical retaliations against Western sanctions and foreign freezes of Russian assets, while stating control could be returned under improved conditions