Pro-Russian separatists in Ukraine's eastern Donbas region on March 1 took control of enterprises of the country's largest steel maker Metinvest and energy conglomerate DTEK that are owned by billionaire Rinat Akhmetov.
The move follows a blockade of transport routes to rebel-held territories by pro-Kyiv war veterans in protest at smuggling across the region. Three days ago, the governments of the two self-proclaimed Donetsk and Luhansk republics that comprise the Donbas threatened to expropriate enterprises if Ukrainian activists didn't unblock rail links.
The so-called Donetsk People's Republic (DPR) imposed "external management" on over 40 enterprises, "with some exceptions", its head Alexander Zakharchenko said. "Documents are being seized at some [enterprises]," Interfax news agency quoted Zakharchenko as saying.
External administration over Akhmetov-controlled enterprises is also being introduced by the neighbouring Luhansk People's Republic (LPR) to control payment of their taxes, local officials said.
Metinvest has large exposure to the Donetsk region, specifically, Yenakiyeve Steel, Khartsyzk Pipe, Krasnodon Coal and a dozen of smaller firms. DTEK has four major assets in the rebel-held territories, including three coal mines and one thermal power plant. The company's distribution units are also involved in electricity supplies to the rebel-held territories, the Concorde Capital brokerage in Kyiv wrote in a research note.
The rail blockade has led to acute shortages of Donbas-mined anthracite coking coal, which accounts for one third of all electricity generated in the country.
On February 15, the Ukrainian government imposed temporary emergency measures in the national energy sector. Earlier, Deputy Prime Minister Hennadiy Zubko said the government could impose rolling blackouts in several regions due to the shortages.
On March 1, Ukrainian Justice Minister Pavlo Petrenko that the nationalisation of Ukrainian enterprises in Donbas will be included in Ukraine's international lawsuits against Moscow. "We understand that Moscow rules authorities in the DPR and LPR," he told journalists. "Their statements spell out the stance of official Moscow, as an aggressor country, regarding some or other actions."
Ukrainian President Petro Poroshenko saied on March 1 that the expropriation of enterprises in Ukraine's eastern Donbas region by pro-Russian separatists is a "brutal and dreadful" violation of international law.
"Russia de-facto confiscated Ukrainian state and private assets located in the occupied territory. This is another evidence of Russian occupation of eastern Ukraine," Poroshenko told Boris Johnson and Witold Waszczykowski, according to his media office.
Poroshenko added that the move took place against the background of steps to bring the eastern territories into "the [Russian] ruble zone", as well gas and power supply systems from Russia, and the introduction of direct budget transfers.
The president promised that these actions of the separatists will "definitely be punished" by Kyiv, and Ukraine will demand broader sanctions for those responsible for the seizure of Ukrainian enterprises in the Donetsk and Luhansk regions.
The European Union has agreed to extend the sanctions against Russia for six months, European Council President Donald Tusk announced on June 22. “Agreed. EU will extend economic sanctions ... more
A joint EU mandate to discuss the operating rules that would apply to Russia's planned Nord Stream 2 gas pipeline is not necessary, Angela Merkel said on June 15. Russian state-controlled ... more
Almost 1,900 Ukrainians used their right to travel to the European Union on the first day of the visa-free regime for citizens visiting the bloc for short-term stays, the country’s State ... more