Russia’s ‘foreign agent’ pressure on VTimes deals blow to investors

Russian businessmen like to talk about two countries: Political Russia, where president Vladimir Putin rewrites the constitution to remain in power and opposition activist Alexei Navalny is poisoned and jailed; and Corporate Russia, where they and their companies buy, sell, and make money no differently from any other European market.

In fact, they do not like to actually talk about the first Russia at all if they can help it. But a divided approach to the political and corporate sides of the country is becoming increasingly hard to sustain.

Moscow’s decision this month to add VTimes, a corporate news and economics outlet, to its list of “foreign media agents” is the first time Russia has used the label’s draconian powers to target a media organisation focusing on business news, and written primarily for investors in the country’s $1.7bn economy.

First imposed against media organisations in 2017, Russia’s “foreign agent” designation — a Soviet-era tag designed to conjure up connotations of espionage and treason — was beefed up last year to target individual reporters and bloggers that Moscow says receive any support from overseas. Twenty media outlets are now designated as such by Russia’s justice ministry.

Those designated must submit to frequent audits or be fined, and preface any news article or social media post with the words, in a font larger than the article text: “This message or material was created and/or disseminated by a foreign mass media performing the functions of a foreign agent and/or a Russian legal entity performing the functions of a foreign agent.”

Other outlets designated have reported an exodus of advertisers and an unwillingness of sources and officials to talk to their reporters. Meduza, a general news organisation that was also designated as a foreign agent in April, has turned to readers for donations in a bid to stay afloat.

VTimes’s website is administered by Stichting 2 Oktober, a Dutch entity. On top of its own journalism, VTimes has a contract with the Financial Times to republish some FT articles in Russian.

But unlike other overseas-supported media outlets in Russia labelled as “foreign agents”, such as those operated by the US government-funded Radio Free Europe/Radio Liberty, it rarely reports on domestic politics or sensitive social issues.

“Such is the situation in Russia that the resources of a stamp collector might soon fall under the status of a ‘foreign agent’,” Boris Titov, Russia’s presidential commissioner for entrepreneurs’ rights told the Financial Times. He was appointed by the Kremlin to stand up for business.

“Freedom of speech, publishing and the media are unconditional values. But in countries that have only been following this path for a short time, such as, alas, Russia, all these institutions are still ‘in development’.”

For VTimes’s reporters, the designation feels like double jeopardy. The outlet was set up less than a year ago by a group of senior editors that quit Vedomosti, previously Russia’s most prominent and trusted business newspaper, when it was bought out by a pro-Kremlin investor. The new owner of Vedomosti brought in a new editor, who banned stories on topics considered taboo by the regime such as Putin’s ratings, according to staff.

That takeover followed a number of deals by which prominent oligarchs considered close to Putin bought control of other Russian newspapers, leaving the vast majority of traditional media channels in the hands of the state or state-friendly entities. The response from Russia’s business community has been muted, in line with a general policy of executives keeping their heads down over Putin’s policies.

But VTimes and other independent business media in Russia, like The Bell, are of particular importance to private investors given they chase news that state-friendly outlets may be under pressure to ignore, such as efforts by government oil company Rosneft to tackle oil production quota cuts, or M&A talks between state banks and private retail companies.

Pressure from the Kremlin on these independent sources of market-moving information is increasing. All Russian media outlets must submit quarterly reports detailing any form of foreign funding.

But under a new law proposed this week, one particular group of media will be exempt from this oversight, a class of reporters that the government says “are of strategic importance”: state-owned media.

henry.foy@ft.com