Google’s Russian subsidiary to file for bankruptcy after bank account seized

A Google spokeswoman stated on Wednesday that Google’s Russian subsidiary planned to file for bankruptcy after authorities seized its bank account, making it hard to pay personnel and vendors, although free services such as search and YouTube would continue to operate.

For months, the Alphabet Inc (GOOGL.O) unit seems to be under fire in Russia for failure to delete content deemed illegal by Moscow and for preventing access to some Russian media on YouTube, but the Kremlin has so far refrained from barring access to the company’s services.

“The Russian authorities’ seizure of Google Russia’s bank account has made it untenable for our Russia office to function, including employing and paying Russia-based employees, paying suppliers and vendors, and meeting other financial obligations,” a Google spokesperson stated.

Google Russia has announced its intention to file for bankruptcy.

A TV program run by a sanctioned Russian businessman reported in April that bailiffs had confiscated 1 billion roubles ($15 million) from Google for failing to restore access to its YouTube account, and this is the first time the US tech giant has reported that its entire bank account has been seized.

Google did not immediately disclose whether the seizure of that cash was the catalyst for the company’s decision to file for bankruptcy, or whether more seizures had occurred. The Federal Bailiffs Service’s database recorded two seizures since mid-March but did not disclose the amounts, as well as other fines and enforcement fees.

The service verified the seizure of Google assets and property.

Google revealed that many of its employees have been relocated out of Russia after Moscow pushed tens of thousands of troops into Ukraine on February 24. However, some elected to stay and are no longer with the organization.

According to a note posted on Russia’s official registry Fedresurs on Wednesday, the Google subsidiary planned to file for bankruptcy and it had anticipated an “inability to fulfill its monetary obligations” as of March 22, which include severance pay, remuneration for current and former employees, and timely mandatory payments.

Google, which has suspended ad sales and most other commercial operations in Russia, has stated that its free services, such as Gmail, Maps, Android, and Play, will continue to be available to Russian users.

Despite repeated threats and fines, Russia announced on Tuesday that it does not intend to block Google’s YouTube, noting that such a measure would certainly cause Russian users to suffer and should so be avoided.