Russia rejects ‘screwdriver assembly’ model for foreign business – Putin aide

Moscow wants foreign firms to bring advanced technologies, expertise, and joint production, presidential adviser Anton Kobyakov has said

Russia seeks foreign technologies and management expertise rather than investment based on simple “screwdriver assembly,” presidential adviser Anton Kobyakov has said.

Speaking to TASS on Sunday ahead of the Eastern Economic Forum in Vladivostok, a major international platform for attracting investment to Russia’s Far East and expanding economic ties with the Asia-Pacific, Kobyakov said Moscow favors pragmatic, “win-win” cooperation involving joint production, capital-intensive industries and scientific research.

“We need the best management practices and the best technologies – all of it!” Kobyakov said. “We no longer want to engage in ‘screwdriver assembly’ of some components of their products. We have done this before,” he explained, referring to a model where foreign manufacturers import largely finished components for basic final assembly.

Numerous US, European, and Asian companies pulled out of Russia due to supply problems caused by the sanctions imposed on Moscow by the West after the escalation of the Ukraine conflict in 2022. Other firms left due to the risk of secondary sanctions or public relations pressure.

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Many departing firms sold their Russian assets to local buyers, often retaining buyback options.

Moscow has since tightened the rules for potential returns. Earlier this month, President Vladimir Putin signed legislation allowing Russian courts, under certain conditions, to terminate buyback rights held by foreign investors.

Kobyakov said businesses from Germany, France, Italy, the UK, Switzerland, Spain, Greece and the Netherlands continue maintaining contacts with Russia despite political pressure from their governments.

Russian officials have argued that Western sanctions ultimately strengthened domestic industry by spurring import substitution and domestic production. Putin said last year that sanctions had become “a powerful catalyst for structural changes” in the economy, prompting Russian businesses to occupy market niches abandoned by foreign companies and accelerate the development of domestic technologies.

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Some major Western companies continue operating in Russia despite the sanctions, including Nestlé, Mars, Mondelez, PepsiCo and Procter & Gamble. An analysis in June by Russian outlet Vedomosti found that 2,350 of 4,265 foreign-owned companies, or 55%, remained active in Russia.