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German Firms Accused of Funding Russia’s War Through Billions in Tax Payments
German companies have paid nearly $2 billion (€1.72 billion) in taxes to Russia since the start of Moscow’s full-scale invasion of Ukraine, effectively bolstering the Kremlin’s war finances, according to a new report by the Kyiv School of Economics (KSE) in cooperation with B4Ukraine and the Squeezing Putin Initiative.
The report estimates that international companies operating in Russia paid at least $20 billion (€17.2 billion) in taxes to the Russian government in 2024 alone, with German businesses ranking among the largest contributors. Between 2022 and 2024, their total payments are believed to have reached around $2 billion annually.
More than half of the roughly 250 German firms that were active in Russia before the war remain in the country today, despite mounting criticism. While many, such as cheese maker Hochland and construction materials producer Knauf, are not violating EU sanctions, campaigners argue that their continued operations indirectly fund Russia’s war effort.
“Companies support Russia’s war economy through the taxes they pay,” said Nezir Sinani, director of B4Ukraine, a coalition of civil society groups pushing to block economic support for Moscow. “By remaining in Russia, they are complicit in its war of aggression.”
KSE’s data suggests that the total tax revenue paid by foreign firms to Russia since February 2022 exceeds $60 billion (€51.8 billion) — equivalent to almost half of Russia’s 2025 defense budget.
Despite the growing backlash, many German firms say leaving Russia is not a simple decision. Hochland, which operates three plants in Russia, told Euronews that it remains committed to its 1,800 local employees and “strongly condemns” the war, but warned that withdrawal could ultimately benefit the Russian state.
Knauf, one of Russia’s largest foreign construction suppliers, has also faced criticism after reports linked its materials to reconstruction projects in occupied Mariupol. The company denied any cooperation with Russian authorities or military-linked contractors, saying it sells only to independent retailers. Knauf said it plans to leave the Russian market but that earlier negotiations with a buyer had failed.
Exiting Russia has become increasingly costly. Moscow raised taxes on foreign asset sales from 15% to 35% and increased mandatory discounts to 60%, with major sales now requiring President Vladimir Putin’s personal approval.
Sinani argues that such hurdles should not deter companies from leaving. “The number of German firms still operating in Russia is unjustifiably high,” he said. “The cost of staying is measured not in euros, but in human lives. Companies should hand over the keys and leave immediately.”
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EU Must End ‘Naivety’ on Trade and Confront China’s Industrial Strategy, Says French Minister
France’s Minister for Foreign Trade, Nicolas Forissier, has called on the European Union to abandon what he described as “naivety” in its approach to global trade, urging a tougher stance on countries accused of distorting markets through industrial policy and trade practices.
Speaking in an interview with Euronews’ 12 Minutes With programme, Forissier said Europe must respond more firmly to what he described as the weaponisation of trade dependencies, warning that China in particular could damage its own long-term interests by undermining European industry.
“The Chinese have to understand that they won’t win anything if they destroy the European industry and then the European market, which is an essential market for them,” he said. “We must no longer be naive.”
His comments come as the European Commission prepares to hold an “orientation debate” next week on how to respond to a surge of low-cost Chinese imports. The discussion is expected to shape possible new trade defence measures, with further talks likely when EU leaders meet in Brussels in mid-June.
Forissier said the shift in thinking was not limited to China alone but applied to any country using commercial leverage to gain strategic advantage. “It is not only China,” he said. “It is all the countries that weaponise trade.”
Among the proposals under consideration is a requirement for EU companies to diversify supply chains, sourcing components from at least three different suppliers in order to reduce dependency on any single foreign market. Asked whether he supported such a measure, Forissier replied: “Yes, we have to.”
Other options include targeted tariffs on sensitive industries such as chemicals, alongside stronger use of anti-dumping and anti-subsidy tools to counter imports priced below domestic market levels. These measures are designed to address concerns over overcapacity in China’s industrial sector and its impact on European manufacturers.
The debate is taking place against a backdrop of widening trade imbalances. EU goods imports from China exceeded exports by €359.3 billion in 2025, marking an increase of nearly 20% compared with the previous year.
China has already warned it could retaliate if the bloc imposes new restrictions, raising concerns about potential escalation in trade tensions between two of the world’s largest economies.
France has repeatedly pushed for a more assertive European trade policy, arguing that state subsidies, export controls on raw materials and industrial overproduction in major economies are distorting global markets.
Forissier stressed that Europe must maintain open dialogue with Beijing while defending its own industrial base. “We try to respect the Chinese,” he said. “The Chinese have to respect us, and this is the message European institutions have to send.”
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