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Putin orders new rules for defense firms in case of martial law

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Russian President Vladimir Putin signed a decree Friday laying out new rules for tightening control of companies that fail to fulfill defense contracts in the event martial law is imposed, the latest step in the Kremlin’s preparations for militarizing the economy as its invasion of Ukraine stretches into a second year, according to Bloomberg.

Under the decree, the state would get the power to take over firms that fail to meet their obligations under military contracts during the period of martial law, suspending the rights of owners and shareholders.

A government working group is to be set up on the operations of arms companies under martial law, according to the order, the text of which was published Friday.

The Kremlin has imposed martial law in the regions of Ukraine its forces currently occupy, except Crimea. Officials have said there are no plans at present to enact it more widely despite periodic calls over the last year to do so.

After the start of the invasion last year, Russia pushed through legal changes giving the government broad powers to control companies’ behavior if needed, mandating what to produce and at what price. It hasn’t yet used that widely, however.