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Google’s Russian subsidiary plans to file for bankruptcy after authorities seize its bank account, making it impossible to pay staff and sellers, but free services, including search and YouTube, will continue to operate, a Google spokesperson said. Wednesday.

The Alphabet Inc unit has been under pressure in Russia for months for not removing content Moscow deems illegal and for restricting access to some Russian media on YouTube, but the Kremlin has so far stopped blocking the access to the company’s services.

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“The seizure of Google Russia’s bank account by the Russian authorities has made the functioning of our office in Russia unsustainable, including hiring and paying Russia-based employees, paying suppliers and vendors, and meeting other financial obligations.” A Google spokesperson said.

“Google Russia has published a notice of its intention to file for bankruptcy.”

A TV channel owned by a sanctioned Russian businessman said in April that bailiffs seized 1 billion rubles ($15 million) from Google for failing to restore access to his YouTube account, but this is the first time that the US tech giant has said its bank account as a whole has been seized.

Google did not immediately confirm whether it was the seizure of those funds that led to its intention to file for bankruptcy, or whether other seizures had occurred.

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The database of the Russian Federal Bailiffs has listed two seizures since mid-March, without specifying the amounts, as well as other fines and enforcement costs.

The service confirmed it had seized Google assets and property.

Google had removed many of its employees from Russia since Moscow sent tens of thousands of troops to Ukraine on Feb. 24. But some had stayed.

A note posted on Wednesday in the official Russian registry Fedresurs said the Google subsidiary planned to file for bankruptcy and had had an “inability to meet its monetary obligations” since March 22, which includes severance payments, allowances for current and former employees and on-time mandatory payments.

FREE SERVICES TO STAY

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Google, which has halted ad sales and most other commercial activity in Russia, said its free services, including Gmail, Maps, Android and Play, will remain available to Russian users.

Russia said Tuesday it had no intention of blocking Google’s YouTube despite repeated threats and fines, acknowledging that such a move would likely cause Russian users to suffer and should therefore be avoided.

Rostelecom Chief Executive Mikhail Oseevskiy said on Wednesday that Google was operating normally in the country, including all of its servers, the TASS news agency reported.

In December, Russia handed Google a charge of 7.2 billion rubles for what Moscow says had repeatedly not been removed from content Russia deems illegal, the first revenue-based fine in such a case in Russia.

That fine increased by 506 million rubles as a result of an enforcement fee, according to data from bailiffs.

The turnover of Google’s Russian subsidiary in 2021 was 134.3 billion rubles, according to the Spark database of Russian companies of the news agency Interfax.

Alphabet said last month that Russia accounted for 1% of its revenue last year, or about $2.6 billion. ($1 = 63.9570 rubles) (Reported by Reuters; Editing by Elaine Hardcastle, Guy Faulconbridge, David Clarke and Barbara Lewis)

This post Google’s Russian subsidiary files for bankruptcy after bank account seizure

was original published at “https://financialpost.com/pmn/business-pmn/googles-russian-subsidiary-to-file-for-bankruptcy-after-bank-account-seized-2”