Cornetto

• This is because Cornetto’s UK-headquarted parent company, Unilever, is still operating in Russia after its invasion of Ukraine, alongside many other western firms such as PepsiCo.
• The sense of normality they give to Russian citizens also arguably fosters support for the invasion of Ukraine.
• Companies still doing business in Russia also hurt the citizens of the countries they come from.
• It’s not “trying to protect or manage” its business in Russia, the company said, but “exiting is not straightforward”.

A tax on the cost of war

• The coalition of sanctioning countries must first implement a tax on a western company’s Russian revenues.
• The tax would cover the company’s sales, based on the goods and services bought by people in Russia.
• The OECD’s Pillar 2 tax agreement uses this principle in its aim to end the practice of fictionally locating profit in tax havens.
• And if that country does not impose the extra charge, other countries in which the firm is active can collect the unpaid tax.

What about non-western companies?

• It may also make it even more profitable for other countries to trade with Russia.
• To avoid such “leakage”, non-western companies who trade with the west and continue to do business with Russia should also be made liable for the tax.
• The approach is simple: if a company wants to do business with the west, it must pay a fine for any trade in Russia.
• French bank Société Générale paid US$1.3 billion to the US government in 2018 as a punishment for providing financial services in Cuba.