Putin Places Japan Tobacco International's Russian Operations Under Temporary State-Linked Management

Vladimir Putin signed a decree on Thursday, Nov. 5, placing the Russian assets of Japan Tobacco International under "temporary management." The manager is a company called Industrial Assets (Promyshlennye aktivy).

The decree covers JTI's stakes in four Russian corporate entities. Those operate factories in St. Petersburg, Rostov-on-Don, the Lipetsk region and the Leningrad region.

JTI employs about 4,000 people in Russia and holds a market share of up to 40%, making it the country's largest cigarette maker. Its portfolio includes Winston, Camel, Sobranie, Glamour and LD, plus domestic labels such as Pyotr I, Russky Stil and Donskoi Tabak.

Who is running it now

Industrial Assets is not a new name in these seizures. Independent Russian media have reported that several companies carry the name, including ones tied to earlier takeovers of foreign businesses.

The Industrial Assets named in the JTI decree was reportedly registered on Sept. 16, according to The Moscow Times. The paper reports it is owned by Sergei Dremov, a former FSB officer from the Kursk region. That ownership detail comes from independent media reporting, not from the decree itself, and the Kremlin has not commented on it.

The decree gave no reason for the move.

JTI's response

JTI, headquartered in Geneva, said in a statement it is aware of the decree. "We are assessing the situation and our options, prioritizing our stakeholders, most notably our employees," the company said.

The company has been in Russia since 1999 and bought local producer Donskoi Tabak in 2018. A company profile updated in November 2025 put JT Group's investment in Russia at $4.6 billion over more than two decades.

JTI did not leave after the 2022 invasion of Ukraine. It said it would suspend new investment and marketing activity, and according to Meduza it changed its country of registration twice.

The mechanism and Moscow's argument

The seizure runs on an April 2023 presidential decree, "On the Temporary Administration of Certain Property." It lets the state place assets tied to countries Russia labels "unfriendly" under outside management.

Moscow's stated justification is reciprocity. Russian officials describe the measure as a response to Western sanctions and to what they call the seizure of Russian assets abroad or limits on Russian owners' property rights.

Putin has defended the takeovers as a symmetrical answer to the freezing of Russian state assets in the West. He has said control of the seized subsidiaries could be returned under favorable conditions.

That is the Kremlin's position. A state decree that hands a profitable business to a freshly registered company, with no court process and no compensation announced, is not a negotiation between equals. The foreign owner has no say in the terms of any return.

A growing list

JTI joins Nestlé, Auchan, Leroy Merlin, Metro and the logistics operator FM Logistic. Nestlé, Metro and Auchan were placed under temporary management in September.

The pattern is consistent. Western and allied companies that stayed in Russia after 2022 hoped a reduced footprint would protect their assets. For Nestlé, Auchan, Metro and now JTI, that bet has not held.

Russia has also restricted what companies from "unfriendly" states can take out of the country. Dividend caps are among the rules that trap profits inside Russia.

The Japan angle

The decree lands during a sharp slide in Russia-Japan relations. Japan is on Russia's "unfriendly" list for joining Western sanctions over Ukraine.

In October, Russia's FSB arrested Yuki Imai, a journalist with the Hokkaido Shimbun, on espionage charges. Japan's government and his employer deny the accusation. The Russian Foreign Ministry has accused Tokyo of systematically using journalists to gather intelligence in Russia, which Japan rejects.

The same month, the Russian Foreign Ministry protested a Japanese company's drone sales to Ukraine and warned of a harsh response. Japan-based Terra Drone delivered small interceptor drones to Ukraine's Ministry of Defense Procurement Agency, in what is described as Japan's first formal arms supply to the Ukrainian military.

Putin also visited the disputed island of Iturup in the Kuril chain in August. Japan claims those islands.

Moscow has not said the JTI decree is connected to any of this. The Moscow Times reports that some analysts read it as punishment for Tokyo's support of Ukraine, but no named official has said so. The decree itself cites no cause.

What comes next

JTI has not said whether it will contest the decree, negotiate with Industrial Assets, or write off the business. The company's stated priority is its roughly 4,000 Russian employees.

Putin's offer to return seized control "under favorable conditions" has no published terms. Whether Moscow defines any conditions for JTI, and whether Tokyo responds to the decree, are the open questions.