Vladimir Putin has signed a decree allowing the state to seize refineries, telecom companies, and retail outlets if their owners fail to adequately protect against drone attacks. The threat of nationalization by a regime with a fondness for the Soviet era is generating fear among Russian businessmen and oligarchs.
According to the decree, almost every element of critical infrastructure, including private enterprises that are deemed crucial for the country’s security and the economy, can be “temporarily” taken into government ownership for an indefinite period.
Few doubt that the decision was a panicked response to recent Ukrainian drone attacks on oil facilities, which have caused a massive gasoline crisis, and on at least 21 warehouses belonging to Wildberries, a Russian version of Amazon, that have already killed at least 14 civilians and caused widespread fear.
On August 24, the day the decree was issued, only 22% of Russian gas stations had AI-95 petrol in stock, according to data from the Benzonavt service, a fuel market monitoring platform tracking real-time gasoline and diesel availability at gas stations. It varies from region to region, with the annexed Crimea peninsula facing the worst fuel shortage – only 2% of gas stations had AI-95 available.
The Kremlin is mobilizing all available resources to protect infrastructure, including a recent decision to launch mobile fire groups (MOG), under army and FSB supervision, to shoot down the drones. Remarkably, the Kremlin made it clear that some of those groups should be formed and funded by private companies to protect their assets.
The new decree goes even further, essentially putting the responsibility for protection against an outside threat on companies themselves.
This is a far cry from the common, centuries-old understanding that it is the government that is ultimately responsible for protecting the country, its citizens, and its businesses – that, after all, is why it has the military and security services at its disposal.
The Kremlin’s approach therefore signals a preference for widening state control, something it is likely to employ more regularly in the future.
Putin’s Russia has taken a strange road to reach this point. In March 2022, we wrote about the Kremlin’s response to the foreign companies’ compliance with Western sanctions and the associated threat to nationalize their Russian assets. Dmitry Medvedev, a deputy head of the Security Council, voiced the idea on the third day after the all-out invasion, and it acquired personal support from Putin in early March. A draft on nationalization was hastily prepared by the government, which introduced a new concept of “the external administration of an organization.” The draft was submitted to the Duma in April and passed its first reading in May 2022.
At the time, it appeared the Kremlin was poised to imitate an early Bolshevik approach to crisis, when the post-1917 regime seized enterprises owned by foreigners to punish the West and to keep Russia’s crucial industries afloat in the middle of the hardships imposed by the civil war and military dictatorship. Eventually, the communist regime nationalized companies with foreign shareholders.
But something unexpected happened post-2022.
The draft never made it to a second reading. Instead, a year later, in April 2023, Putin signed a presidential decree introducing a different concept — “the Temporary Management of Certain Property,” with certain property referring to the assets of foreign companies from countries deemed unfriendly to Russia.
What followed did not resemble nationalization, but rather a redistribution of assets — valuable enterprises and companies were taken from their owners and ended up in the hands of Putin’s friends, cronies, and bodyguards. For instance, the Russian enterprises of the French company Danone were put under temporary management and ended up in the hands of Chechen leader Ramzan Kadyrov’s nephew.
Rolf, one of Russia’s largest car dealership networks, owned by Sergei Petrov, an anti-Kremlin businessman now in exile in Austria, was ultimately sold at a massive discount to the brother-in-law of the head of the Presidential Security Service (SBP), Putin’s Praetorian Guard.
In short, at the time Putin adopted a model of rewarding friends through robbery, more reminiscent of the behavior of 1960s and 1970s African dictators rather than a big Leninist nationalization project.
But in August, the pressure of four and a half years of war and constant drone attacks on critical infrastructure across the country appears to be forcing Putin to change tactics toward a more totalitarian approach.
Some Kremlin insiders insist that the new policy – taking over the enterprises which failed to defend themselves against drones – would affect only small- and medium-size companies, which at some point would have no choice but to be absorbed by bigger corporations.
This is a tactic the Kremlin is already using in dealing with the country’s telecom industry – under the presumption that half a dozen big national operators are more likely to comply with the increasing demand for more censorship and surveillance than thousands of town-level operators scattered across the country.
But apparently, this time it would go further – the logic of escalation, of the war getting bigger, doesn’t leave Putin a lot of room for other options apart from turning Russia into a more militarized and more tightly controlled economy.
Andrei Soldatov and Irina Borogan are Non-resident Senior Fellows with the Center for European Policy Analysis (CEPA). They are Russian investigative journalists and co-founders of Agentura.ru, a watchdog of Russian secret service activities. Their book , Our Dear Friends in Our Dear Friends in Moscow, The Inside Story of a Broken Generation, was published in 2025.
Europe’s Edge is CEPA’s online journal covering critical topics on the foreign policy docket across Europe and North America. All opinions expressed on Europe’s Edge are those of the author alone and may not represent those of the institutions they represent or the Center for European Policy Analysis. CEPA maintains a strict intellectual independence policy across all its projects and publications.
