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Yandex CEO Arkady Volozh resigns after being added to EU sanctions list

Arkady Volozh, CEO of Russia’s biggest internet company Yandex, has resigned after being added to the European Union’s list of individuals sanctioned as part of its response to the illegal invasion of Ukraine.

Yandex is an analogue of Google, having started as a search engine and then added numerous productivity, cloud, and social services. The company has since expanded into ride-sharing and e-commerce.

The European Union (EU) last Friday named Volozh and many others as part of its sixth round of sanctions against Russia.

“As founder and CEO of Yandex, he is supporting, materially or financially, the Government of the Russian Federation and is responsible for supporting actions or policies which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine,” the EU’s listing states.

The document also accuses Yandex of “promoting State media and narratives in its search results, and deranking and removing content critical of the Kremlin, such as content related to Russia’s war of aggression against Ukraine.”

That issue accords with a statement from EU High Representative for Foreign Affairs and Security Policy Josep Borrell that explains one aim of additional sanctions is “banning more disinformation actors actively contributing to President Putin’s war propaganda.”

Another issue is that Yandex’s complex ownership structure means the EU feels Russia’s government can veto the company’s activities if they are felt to counter the national interest.

That unflattering assessment of Yandex and Volozh appeared on Friday, as did a Yandex statement that points out the company itself has not been sanctioned by the European Union, the United States or the United Kingdom.

The statement is, however, silent on whether Yandex felt it could escape sanctions if Volozh stepped down.

Yandex’s statement does offer the opinion: “We do not believe that these developments will affect the company’s operations, its financial position or its relations with partners.”

One of those developments concerns the 45.3 percent voting interest, and 8.6 percent ownership, that Volozh holds in Yandex. He’s signed over the voting rights to a trustee who will follow the Yandex board’s directives.

“While I consider this decision to be misguided and ultimately counterproductive, I do not intend to give any instructions to my family trust as long as sanctions are in place,” Volozh is quoted as saying in Yandex’s statement.

The EU’s new round of sanctions also saw it dump three more banks – Sberbank, Credit Bank of Moscow, and Russian Agricultural Bank – and the Belarusian Bank For Development And Reconstruction – from the SWIFT interbank messaging system, and suspend three more Russian media outlets.

Another new measure that could impact the tech community is a prohibition on providing consultancy services to Russia (and accounting or public relations services, too).

The most significant new sanction is a ban on Russian oil and gas, a measure that will deprive the nation of much revenue, weakening its economy and theoretically also its ability to wage war. ®