(Bloomberg) — Russian President Vladimir Putin on Friday signed a decree with new rules tightening scrutiny on companies that default on defense contracts in the event of martial law being imposed, the latest step in the Kremlin’s preparations to close the militarize economy as his invasion of Ukraine extends into a second year.
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Under the decree, the state would be given the power to take over companies that fail to meet their obligations under military contracts during the period of martial law, suspending the rights of owners and shareholders. The order, the text of which was published Friday, calls for the establishment of a government task force to deal with the operations of arms companies under martial law.
The Kremlin has declared martial law in the regions of Ukraine it currently occupies, with the exception of Crimea. Officials have said there are currently no plans to introduce it more widely, despite periodic calls over the past year to do so.
Russian magnates fear the Kremlin tightening as the war drags on
Following the start of the invasion last year, Russia has introduced legislative changes that give the government extensive powers to monitor companies’ behavior if necessary, and to mandate what to produce and at what cost. However, it has not been widely used yet.
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