Google’s Russian subsidiary to file for bankruptcy after bank account confiscation

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Authorities at Google’s Russian subsidiary plan to file for bankruptcy after its bank accounts were confiscated, making it impossible for employees and vendors to pay, but free services, including search and YouTube, will continue to operate, a Google spokesman said Wednesday.

The Alphabet Inc. unit has been under pressure in Russia for months, with Moscow failing to remove content it deems illegal and restricting access to some Russian media on YouTube, but the Kremlin has so far blocked access to the company’s services.

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“The seizure of Google Russia’s bank accounts by the Russian authorities has made our Russia office incapable of functioning, including hiring and paying Russia-based workers, paying suppliers and vendors, and fulfilling other financial obligations,” a Google spokesman said.

“Google Russia has issued a notice of intent to file for bankruptcy.”

A TV channel owned by an authorized Russian businessman said in April that the bailiffs had confiscated 1 billion rubles ($ 15 million) from Google for failing to regain access to its YouTube account, but this is the first time the US technology giant has claimed its bank account.

Google did not immediately confirm whether it confiscated the funds it intended to file for bankruptcy, or whether other seizures were made.

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Russia’s Federal Bailiffs Service has listed two seizures since mid-March, not to mention the amount, as well as other fines and enforcement fees.

The service confirms that it has confiscated Google assets and property.

Google has fired many of its employees from Russia since Moscow sent thousands of troops to Ukraine on February 24. But something remains.

A note posted on Russia’s official registry Fedresurs on Wednesday states that the Google subsidiary wanted to declare bankruptcy and predicted “inability to meet its financial obligations”, including severance pay, current and former employees’ remuneration and timely payments from March 22.

Free service to stay

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Google, which has stopped selling advertising and most other commercial activities in Russia, said its free services, including Gmail, Maps, Android and Play, would be available to Russian users.

Russia said on Tuesday it did not plan to block Google’s YouTube, despite repeated threats and fines, acknowledging that such a move could hurt Russian users and should be avoided.

Mikhail Osivsky, chief executive of Rostelecom, said on Wednesday that Google, along with all of its servers, was operating normally in the country, according to the Tas News Agency.

In December, Russia handed over to Google a charge of 7.2 billion rubles, which Moscow said Russia had repeatedly failed to delete content it considered illegal, the first of its kind in Russia.

That fine increased to 506 million rubles due to an enforcement fee, the bailiff’s data showed.

Google’s Russian subsidiary’s revenue in 2021 was 134.3 billion rubles, according to the Interfax news agency’s Spark database of Russian companies.

Alphabet said last month that Russia accounted for 1% of last year’s revenue, or about $ 2.6 billion. (1 = 63.9570 rubles) (Reporting by Reuters; Editing by Elaine Hardcastle, Guy Falconbridge, David Clark and Barbara Lewis)

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