Tens of thousands of Russian citizens have been dispatched to the war in Ukraine since late February. However, on 21 September, seven months into the invasion, President Vladimir Putin invoked partial military conscription, leading a quarter of a million Russians to flee the country as soon as possible, according to some estimates.
In the weeks since that announcement, Putin claims more than 200,000 men have been mobilised, with the help of companies based in Russia. Indeed, unprecedented legislation from 21 September mandated that all organisations, including international companies, conduct military registration of their staff (if at least one of the employees is eligible for military service). They were also ordered to assist with delivering the summons from the military to their employees, ensure the delivery of equipment to assembly points or military units, and provide buildings, communications, land plots, transport and other material means, as well as any relevant information requested by the authorities.
In short, international companies are now obliged to assist the Kremlin’s war mobilisation by helping conscript soldiers and equip the army. Foreign businesses in Russia employ some 700,000 people in the country.
Investment Monitor sat down with Anthony Walker, co-founder of ArieGuard investment banking platform, to get a better understanding of how foreign and domestic businesses in Russia are involved in the mobilisation effort. Walker, who is based in Russia, has more than 20 years’ experience in the Russian market, both as a mergers and acquisitions lawyer and investment banker. At the very start of our call, he tells me that he must choose his words carefully, as one never knows who is listening.
Where do these men being mobilised actually live?
The Russian registration system known as Propiska requires all its citizens to be registered to a specific address (which is stamped in their passport). When they move home they must update it, in theory. Meanwhile, all men over the age of 18 must register their address with their local military office. In fact, to get a job in Russia, these boxes must be ticked.
One would assume, therefore, that locating Russian citizens is a simple process. It is not. Walker explains how, for many years, most people have not lived at the location of their official registration, either because they (or their landlord) have not bothered to re-register. “So the authorities try and find somebody, they can only go to their registered address,” says Walker. “And that is where they look, but they often find that the person doesn’t live there anymore.”
This is a significant problem for the Russian government, especially when it comes to war mobilisation. “To be conscripted, the process is that an individual is handed a piece of paper, and sign that they received it,” says Walker. “It is a notification that you must report to your military office, often at a specific time and date. Then you go there and they assess your suitability for military service.”
As such, for young Russian men seeking to avoid conscription, evading that notification is key. “People are hiding from this notice, which, technically, is not yet a criminal offence,” says Walker. “Many have their correct addresses on record, so they are staying at their grandmother’s place.”
Workplaces are good locations to find conscripted Russians
For those living away from their official address, a place of employment is the next point of contact for the Russian authorities. This is where companies come in.
“Most peoples’ employment will be registered in the government system,” says Walker. “So the authorities will go to your office and say we are here to speak to Mr XYZ. An employer might lie and say they are at home sick, or they might say: yes, he is in office number three. I heard of one person who was warned by his bosses that the military police were down at the reception. So he feigned a heart attack, and called an ambulance to try and disappear.”
Military officers can turn up at any time. Sometimes they give advance notice of their arrival, which gives the employer the opportunity to warn the employee, if they choose to. Some do, others don’t.
Walker goes on to explain that he has heard anecdotal stories of employers warning people or lying on their behalf. “In cases of business being told about the military’s arrival in advance, I have heard of employers telling their employees to hand in their voluntary termination, should they wish, so as to avoid the officers and effectively run away.” At the other end of the spectrum, however, some companies will leave their employees in the dark – and maybe even lure them into the office on the date of the military’s check-in.
However, Walker says he has not heard of Russian or foreign companies proactively going out of their way to help with mobilisation, or actively rebelling too. Instead, they wait for the authorities to contact them. “Why would they be proactive? Nobody wants to lose their workers, for one. They will simply do what the law requires of them.” he adds.
Some sectors can find loopholes to mobilisation
In order to protect their businesses from being impacted by conscription, companies can apply for staff exemptions, a law that favours the IT and banking industries, among others that are perceived as ‘crucial to the economy’, explains Walker.
“Many companies applied for their whole staff to be protected, and I have heard, anecdotally, that one-third of companies have been protected in those key industries,” he says. “But most businesses, even across office work, cannot apply for this protection for their staff. And so I know offices where 80% of the men are not going into the office at the moment. A lot of offices are half-empty because young men are working remotely because they are worried about being served papers. And in that sense, the employer is complicit in permitting remote working. Some are even offering their employees to go work in the company’s foreign offices, say in Dubai, if they wish.”
However, if the military cannot find an individual at work, they may then ask the company for the employee’s current address in Russia. However, in many situations the company may only have the outdated official address that the government already has.
It is also worth mentioning that corruption plays a role in this whole picture too, according to Walker. “I wouldn’t be surprised to hear if employees are offering money to be included on the list of protected workers that their employers are submitting to the government,” he says.
People outside the world of white-collar work have fewer options and are far more vulnerable to conscription. “For now, mobilisation only affects reservists or people with prior military experience,” says Walker. “How many people in IT companies or banking have prior military experience? If you have got a university degree you were likely automatically exempted from the one-year military service that all Russian men are required to undertake. So mobilisation is affecting different sectors differently, and it is hitting labour-intensive industries in poorer regions the hardest.”
For foreign companies, many of whom have factories in Russia’s poorer regions, there is one simple way to hide employee information and, more importantly, avoid the blant ethical morass of assisting Putin’s war on Ukraine. Exit Russia.