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Google Russia files for bankruptcy following a bank account seized

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On Wednesday, a Google representative said that the company’s Russian subsidiary planned to file for bankruptcy after authorities confiscated its bank account, making it hard to pay employees and suppliers. 

However, free services such as search and YouTube would continue to operate. For months, the Alphabet Inc business has been under fire in Russia for failing to remove unlawful material and limiting access to specific Russian media on YouTube, but the Kremlin has refrained from barring access to the company’s services.

“The Russian authorities’ confiscation of Google Russia’s bank account has made it impossible for our Russia office to operate,” a Google spokeswoman stated. “This includes hiring and paying Russia-based workers, paying suppliers and vendors, and fulfilling other financial responsibilities.”

“A notification of Google Russia’s intention to file for bankruptcy has been published.”

Bailiffs took 1 billion roubles ($15 million) from Google for its refusal to restore access to its YouTube account, according to a TV program controlled by a sanctioned Russian billionaire in April, but this is the first time the US internet giant has declared its complete bank account has been taken.

Google could not immediately apparent whether the seizure of that money prompted its bankruptcy filing or whether more seizures had taken place.

Since mid-March, the Federal Bailiffs Service’s database has documented two seizures without stating the amounts and various penalties and enforcement costs.

Google’s assets and property were taken, according to the service.

Since Moscow launched tens of thousands of soldiers into Ukraine on February 24, Google has relocated many of its workers. However, some persisted.

According to a note posted on Russia’s official registry Fedresurs on Wednesday, the Google subsidiary intended to declare bankruptcy and had foreseen an “inability to fulfil its monetary obligations” since March 22, including severance pay, remuneration for current and former employees, and timely mandatory payments.

STAYING SERVICES FOR FREE

Google stated its free services, such as Gmail, Maps, Android, and Play, will remain accessible to Russian consumers despite the suspension of ad sales and most other commercial activities in Russia.

Despite threats and penalties, Russia said on Tuesday that it would not restrict Google’s YouTube, recognizing that such a step would undoubtedly harm Russian users and should be avoided.

According to the TASS news agency, Rostelecom Chief Executive Mikhail Oseevskiy announced on Wednesday that Google was running normally throughout the nation, including its servers.

In December, Russia fined Google 7.2 billion roubles for what it claimed was a continuous failure to erase information deemed unlawful, the first revenue-based penalty of its sort in Russia.

According to bailiffs’ records, the fine was raised by 506 million roubles owing to an enforcement cost.

According to the Interfax news agency’s Spark database of Russian enterprises, the revenue of Google’s Russian business in 2021 was 134.3 billion roubles.

Last month, Alphabet said that Russia contributed 1% of its sales last year, or $2.6 billion.