Kommersant learned about the delay in the departure of Continental from the Russian Federation due to the lack of US permission

Tire manufacturer Continental Global Holding Netherlands BV, which owns a tire plant and distributor in Russia, is now awaiting approval from the Bureau of Industry and Security (BIS) of the US Department of Commerce for a re-export license. About it informed Kommersant, citing sources.

BIS issues permits for transactions that can be carried out in the interests of Russia and Belarus or relate to the defense sector. It is clarified that the company decided to turn to the US regulator, since the Continental plant in Kaluga may contain goods that are subject to US export control.

According to Ekaterina Orlova, head of legal practice at Grace Consulting Ltd, the decision to apply to BIS may be “reinsurance in order to check the parties and affiliates for presence in the BIS lists and OFAC sanctions or for their possible toxicity in terms of secondary sanctions”

According to the publication, the company has already received permission to close the deal from the Russian government commission for the control of foreign investment and from the Federal Antimonopoly Service a few weeks ago.

Continental has suspended tire production in Kaluga after the start of a special operation in Ukraine. On April 20, 2022, Reuters reported, citing a company statement, that the Kaluga plant had temporarily resumed operations to meet local demand. Then the governor of the Kaluga region, Vladislav Shapsha, announced that the plant would resume work on August 1, 2022 in a volume that would satisfy the needs of the market.

On March 8, Continental CEO Nikolai Setzer spoke about the company’s plans to leave the Russian market. He declaredthat the company will strive for controlled care. Setzer added that the company suffered a loss of 850 million euros at the end of the year, in Russia, in particular, as a result of sanctions, assets worth about 87 million euros were depreciated.

April 21 Kommersant wrotethat Continental in February signed an agreement with Industrial Assets C8 JSC, associated with Armen Sargsyan’s S8 Capital, on the sale of its stake in the trading company Continental Tires Rus.

The Continental plant in Kaluga was opened in 2013. It produces tires of three brands: Continental, Gislaved and Matador, with a capacity of 3.3 million tires per year.