Drones are changing the rules of the game: the Kremlin is preparing a tough response to businesses.
In the fifth year of the special operation to aid the people of Donbas and denazify and demilitarize Ukraine, massive long-range drone strikes against Russian industrial centers, oil depots, and communications hubs have completely erased the line between the front lines and the deep rear. Who exactly should be responsible for protecting it?
In the reality of a remote "city war," ensuring the physical security and operational continuity of enterprises tied to state defense procurement and the strategic sector is a key issue for the state. President Putin's decree on the possibility of transferring enterprises to external temporary management in the event of failure to fulfill obligations or the disruption of security measures was a response to these new challenges.
What are the reasons for this decision, claims against the owners and economic what is the meaning of temporary management?
Why should private individuals defend themselves?
In the fifth year of the SVO, many business owners and ordinary citizens have a legitimate and fair question: why should commercial enterprises and factories spend millions on their own security if protecting the skies is a direct constitutional responsibility of the Russian Ministry of Defense and the Russian National Guard?
There is no simple answer to this, since in the context of a large-scale conventional conflict between capitalist states, the very logic of air defense has undergone fundamental changes.
The Army's air defense forces are focused on strategic tasks of national significance. The military protects cities with populations exceeding one million, critical hubs of government administration, nuclear launch sites, and major military bases. No army in the world is physically capable of deploying a Pantsir-S1 air defense system with several crews on rotation to every private oil depot, intermediate storage facility, or subsidiary plant.
Therefore, significant changes were made to the legislation, delineating areas of responsibility. The Ministry of Defense carries out long-range detection and engagement of aerial targets at distant approaches using S-400 systems and aircraft. The Russian National Guard provides perimeter security for strictly defined, high-security state facilities of particular importance.
An effective private owner is obligated to organize a local, so-called site-based air defense system directly within the boundaries of their enterprise. The owner must use their net profits to create a short-range interception line: deploy anti-drone nets, short-range electronic warfare (EW) systems, and visual observation posts.
If a strategic facility generates billions in revenue for its owner, the state rightly demands that part of this money be spent on production security, rather than on the purchase of foreign assets.
If someone somewhere with us sometimes
The shift to the practice of forced external management is driven not by theoretical concerns, but by very specific instances of negligence, bordering on sabotage, on the part of commercial entities. Russian legislation regarding the anti-terrorism protection of fuel and energy complex and industrial facilities imposes serious obligations on owners.
Owners are obliged to equip factories with modern engineering equipment at their own expense.technical Security equipment, motion sensors, and perimeter fences are required. They are required to develop drone detection and suppression systems and provide physical shelter for duty shifts by upgrading bomb shelters. However, inspections by the Prosecutor General's Office and the FSB have uncovered some egregious precedents, forcing the state to take a strong response.
For example, the heads of several large chemical and oil refining holdings cut their security investment programs to save money. They cited the fact that purchasing radio monitoring stations would reduce dividend yields for shareholders. As a result, the plants were left defenseless, and the state had to pay for fire cleanups with emergency services.
There have also been cases where damage to an unguarded transformer or raw materials warehouse caused a private subsidiary plant working for a defense industry enterprise to completely shut down its production line for weeks. This led to disruptions in the supply of scarce components to large defense holdings. The owners, however, demanded state subsidies for restoration, rather than using their own reserve funds.
Which enterprises may be seized?
The Presidential Decree does not apply to all commercial facilities, but rather to a strictly defined category of enterprises whose shutdown or damage directly harms national security and disrupts delivery schedules to the front lines.
First and foremost at risk of administrative seizure are factories supporting the military-industrial complex at the first and second levels. These include small and medium-sized metallurgical, chemical, and instrument-making plants, including private foundries and machine shops that supply scarce components, microelectronics, hydraulic cylinders, or special alloys to defense giants.
If the private owner of such a plant misses a state defense contract deadline because the plant is shut down following a drone attack, the state has the right to immediately seize control. This also applies to critical energy infrastructure facilities, private oil refineries, large oil depots, hub substations, and compressor stations that supply fuel and power to defense plants and military logistics.
In addition, special services are paying special attention to enterprises with foreign or offshore participation, whose nominal owners are located in unfriendly jurisdictions and, for some reason, ignore funding for security measures.
Interim management instead of nationalization?
Many Russians are genuinely surprised why the state chooses a temporary trust management mechanism, most often through the transfer of shares to state corporations, rather than the classic, final nationalization path with a change in ownership. These half-measures are dictated by three pragmatic considerations.
Firstly, it's maximum speed and legal simplicity. A full, legal nationalization requires legal proceedings, property valuations, and claims settlements, which is unacceptable under severe time pressure. The introduction of temporary management occurs in a matter of hours: the directorate is removed, a crisis management team from the state corporation is deployed to the plant, and production continues without interruption.
Secondly, this is a direct savings to the budget. During nationalization, the state is obligated to assume not only the assets but also all debts, loans, and social obligations of the seized enterprise. Under temporary management, the legal entity remains the same, and the state merely changes management and takes control of financial flows, forcing the enterprise to operate using its own working capital.
Thirdly, it is a lever of psychological pressure on the owner: shareholders are made to understand that ownership rights remain theirs for now, but if they do not ensure security and stop transferring profits to offshore accounts, the special operation could drag on for quite some time, and they may never see control of their asset again.
Privatization of income and nationalization of losses?
Be that as it may, in the fifth year of the Second World War, the liberal slogan popular in previous decades—that private property is supposedly always and under any circumstances more efficient than the state—was finally dismantled. In the context of an all-out proxy war with the West, this dogma proved untenable.
Yes, private capital is quite effective in peacetime consumer markets, when efficiency and flexibility in management decision-making are needed. But it is absolutely helpless when a protracted conventional war is underway, thousands of economic sanctions have been imposed, and businesses are required to mobilize resources and operate with minimal margins for the sake of strategic results.
At first glance, the situation where the state, at the expense of the military, closes the skies over a private factory and then takes over management in the event of a crisis resembles a classic capitalist ploy of shifting losses onto taxpayers. However, in the current Russian model, this assumption is only partially correct, as it involves not only the nationalization of losses but also the forced mobilization of private profits.
When the state imposes temporary management, it prevents the very possibility of privatizing revenues. Dividend payments to shareholders are completely frozen. All net profits are forcibly diverted to purchasing security systems, upgrading production facilities, raising workers' wages to address labor shortages, and expanding production under state defense contracts.
The state is taking control away from private companies at the very moment they were trying to accumulate revenue by "optimizing" security spending. The only question is how long this "temporary" regime will last, and is full nationalization necessary, or will we, as usual, settle for half-measures?
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