The Great Nationalisation in Russia. How the Kremlin is repressing the Russian elite

In 2024, immediately after the Russian presidential election, an active process of internal repression against the Russian elite began.

Initially, this process covered representatives of the middle tier of the Russian bureaucratic system. Corruption investigations were launched, bringing to justice deputy governors and officials who held positions related to urban development, especially those involved in construction – positions directly related to the distribution of budget funds.

Subsequently, having obtained a significant body of evidence from mid-level bureaucrats, Russian investigative authorities began cases against senior officials, reaching regional governors and ministers of the Russian government. In most cases, the charges were brought after the minister or governor lost their position, either at the end of their term of office or as a result of resignation at their own request. That is why the media has recently been filled with headlines about the arrest of one former minister or governor or another.

The next step in the continuation of internal elite repression was the nationalisation of significant assets in various sectors of the economy in the name of fighting corruption, rethinking the privatisation processes of the late 1990s and early 2000s, and confiscation of assets of strategic importance to the state.

Reasons

The official reason for the nationalisation of assets (according to the Russian Prosecutor General's Office) - is to strengthen economic security. According to the office, assets owned by people with dual citizenship, who hold savings outside Russia and actively cooperate with foreign companies, will be nationalised.

For example, the reason for the nationalisation of Domodedovo Airport in July this year was ‘foreign control over the management company DME Holding’. According to the Prosecutor General's Office, 'the owner of the holding company, Dmitry Kamenchik, is a resident of Turkey and the UAE, and his partner, Valery Kogan, is a resident of Israel. According to court documents, these countries are pursuing Western policies aimed at defeating Russia. According to the prosecutor's office, Kamenchik and Kogan withdrew funds from Russia under the guise of debt payments to foreign creditors and dividends.'

Other official reasons include the fight against corruption and lobbying influence. Under these conditions, various enterprises owned by former Russian officials that are not connected with foreign countries are being nationalised, because after 2022, Russian officials have almost no way to legalise their assets in the West due to sanctions, and in other countries due to restrictions imposed by the state internally.

The second main reason is economic. According to Forbes analysts, the Russian Federation nationalises only profitable companies and assets, which is atypical for the nationalisation process in most countries around the world. “The first option: the state nationalises losses and then privatises profits.' In other words, it rescues strategic companies, brings them out of crisis, and then returns them to private ownership. The second option: the state nationalises profits and sells losses – successful private companies return to its control. Nationalisation here can be either direct or hidden – through market consolidation around large state-owned corporations, for example, around Rosneft in the oil and gas sector. The third option: to nationalise strategic sectors where the economy no longer plays a significant role. In Russia, the second and third options prevail, while the first is practically non-existent”. In this way, the state is trying to fix the difficult budget situation at the expense of profitable companies.

The third reason is the general pressure on the Russian elite to weaken anti-regime sentiments through intimidation. In line with the nationalisation process, the Russian elite will try to distance itself from all ties with foreign companies, becoming even more closed and fragmented, significantly reducing the chance of any resistance to the regime, since elite ties between countries disappear.

The fourth reason is the ambitions of representatives of the Russian Prosecutor General's Office. As a result of the nationalisation process, in September 2025, Prosecutor General Igor Krasnov became the head of the Supreme Court of the Russian Federation. Thus, the state is involving representatives of the prosecutor's office to conduct these cases and effectively bring them to a conclusion.

Temporary results

According to analysts' estimates and information from the Russian Prosecutor General's Office from 2022, assets totalling 2.56 trillion roubles were nationalised by the early 2025. Due to the intensification of this process in 2025, the total amount grew to almost 4 trillion. A total of 102 cases of asset nationalisation were identified.

"Most of the assets were confiscated on the basis of the law on strategic companies. Over the past three years, assets worth 1.539 trillion roubles have been seized in this way. In corruption cases, assets worth 1.07 trillion roubles were transferred to the state, 385.4 billion roubles for violations during privatisation, 621.5 billion roubles for allegations of ineffective management and control, and 181.8 billion roubles in the fight against extremism."

Consequences of the process and impact on the Russian-Ukrainian war

The overall consequence of the process can be described as the complete transition of the Russian economy to a military footing. Profits from nationalised companies will cover the Russian budget deficit, which has been gradually increasing over the years and may amount to several percent of GDP by 2026.

The main domestic political consequence of the process is the atomisation of the Russian elite, a reduction in international economic ties, and a possible outflow of entrepreneurs from Russia to avoid criminal proceedings. In essence, it is the strengthening of authoritarian power through the distribution of resources. Given that such distributions can be carried out frequently, disregarding private property rights, the economic elites of the Russian Federation will soon be represented exclusively by loyalists and, more likely, even activists of the current regime. Conformists and instrumentalists, who currently represent the majority of the Russian Federation's elite, will become increasingly scarce.

The impact of this process on the war is mainly economic. The Russian state will have additional financial support that can be used for military needs. In the future, we can expect an increase in spending on the war, on the development of military production, and an increase in opportunities to recruit people for contract service, because so far the Russian army is formed on a contract basis, and the state spends significant economic resources to maintain this status quo, fearing political problems associated with mobilisation.

The analytical article was prepared by Dmytro Olkhovychenko, an intern at the think tank Resurgam.