Hollywood is still complicit with Putin's pariah state, and business is booming in Russia.

This week's Berlin Film Festival, which is being held for the first time since Russia's extensive invasion last year, has focused heavily on the conflict in Ukraine.

Volodomyr Zelenskyy, the president of Ukraine, came via satellite at the festival's opening ceremony to urge attendees "not to remain silent" against Russia's unwarranted action. In "Superpower," which had its world debut this week, Sean Penn attacked Russian President Vladimir Putin, calling him a "war criminal" and a "creepy little tyrant." 

Since the beginning of the conflict, moral fury has not been in short supply as the international film community has supported the Ukrainian war effort in a show of almost unanimity condemnation of the Kremlin's illegal aggression. Nonetheless, a lot of US and foreign businesses covertly carry on doing business with Putin's pariah state or have picked up where they left off once the war started.

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Despite the removal of Hollywood blockbusters from Russian theatres in the wake of the invasion of Ukraine, more than 140 U.S.

Data from Russia's Cinema Fund, which monitors ticket sales at the nation's exhibitors, shows that movies were released in Russia last year after the war started.

The Russian box office is off to its best start ever despite teetering on the verge of collapse following last winter's Hollywood withdrawal, with January going down as the exhibition industry's highest-grossing month of all time.

According to Box Office Mojo data, the action-thriller "Plane" and the spy comedy "Operation Fortune: Ruse de Guerre" directed by Guy Ritchie and distributed internationally by STXinternational and Lionsgate, respectively, are now among the top 10 grossing movies in Russia for 2023. This year will already see the release of more than 130 foreign films.

A STXInternational representative declined to comment for this article. A company representative declined to comment when asked about the Russia releases of Lionsgate films like "Plane" and the Jennifer Lopez vehicle "Shotgun Wedding," but a person with knowledge of the situation told Variety that the studio has suspended new business with Russia but continues to uphold agreements made with organisations not subject to international sanctions.

In Russian theatres last year, "Three Thousand Years of Longing" brought in more than $4.3 million.

Yet, since the start of the war, other businesses have been signing new contracts.

Although a significant U.S. sales agency insisted it did not work with any "Russia-based businesses," it did admit that movies sold to independent distributors might end up in Russian theatres. According to Box Office Mojo, FilmNation, whose movie "Three Thousand Years of Longing" made over $4.3 million in Russia last year, claims it leaves it up to its content creators to decide whether or not to release their films there.

There are no regulations that prevent American companies from conducting business with Russian entities that are not included in the sanctions list, despite the fact that the U.S. and Europe have imposed a number of penalties against Russian billionaires and companies with connections to the Kremlin.

Some major Russian distribution firms have established operations in Europe or already had bases there, enabling them to sign overseas contracts without having to worry about Russian banks freezing their international payments.

Following the example of Cannes, Venice, and other festivals, the Berlin Film Festival and the European Film Market disallowed representatives from the Putin dictatorship and allowed independent Russian filmmakers to attend this year's event.

Leading Russian distributors have purchased flights to Berlin, and meetings are being held outside of designated EFM locations by at least six different companies.

Despite lip service, it appears "more and more companies who were not working with Russian distributors decided to start again," according to Daniel Goroshko of arthouse distributor A-One, which last December released Ruben stlund's Cannes Palme d'Or-winning "Triangle of Sadness" in Russian theatres.

When contacted by Variety, numerous European sales agents stated that they flatly decline to engage with Russian clients, however others are still open to dealing with dependable customers who have no connections to the Putin regime.

Meanwhile, French vendors haven't been coy about their business with Russia: A group of French sales representatives came together last month to pay the accommodation expenses for Russian distribution firms attending Unifrance's Rendez-Vous in Paris.

According to Unifrance, Russia was the third-largest foreign market for French movies in 2022 with 2.6 million admissions, after placing in the top two each of the previous three years. The action-packed epic "The Three Musketeers" by Pathé is one of the well-known French films that will soon be seen in Russian theatres.

The Three Musketeers by Pathé will be shown in Russian theatres.

International Pathe

A French sales representative who declined to be identified defended the industry's stance to Variety, arguing that a total ban on foreign films would only serve to further alienate Russia from the rest of the world, especially the many Russian citizens who oppose the conflict in Ukraine. They declared, "Putin wants this."

In fact, the Russian industry has no trouble finding partners who are keen to work with it in what was the sixth-largest theatrical market in the world in 2021.

Russian companies were present in large numbers at the Film Bazaar market in Goa last November, where film promotion body Roskino and the Moscow Export Center hosted two pavilions for Russian executives looking to court local partners. India, which continues to purchase oil from Russia, has steadfastly refused to condemn the Ukraine war. (The European Film Market forbids both state-backed organisations.)

In the meantime, top production and distribution company Central Partnership, owned by Gazprom-Media, recently signed an agreement with renowned distributor Four Star Pictures to release a number of Russian films in theatres throughout the Middle East.

In addition, the company is bringing its "full slate" to South America, where there is a big market for Russian action-thrillers and other genre movies, according to Central Partnership CEO Vadim Vereschagin.

The public posturing of the previous year is starkly contrasted by the fact that a large portion of the international film industry still conducts business with Putin's Russia. Despite the high stakes, many filmmakers swear they won't change their anti-Russian position.

When asked in Berlin by Variety how it would make him feel to have his unabashedly pro-Ukrainian movie "Superpower" shown in Russian theatres, Penn was indignant, saying that "there is no room for anything that involves [a single] ruble" changing hands in the international entertainment business.

Dmitry Ivanov, a producer and distributor from Ukraine, shared that attitude and drew a parallel between the armaments destroying his nation and the contracts Russian film studios are signing with Hollywood and other international partners.

Ivanov argued that the only way to "halt the tremendous bloodshed in Ukraine" is to outright forbid all business dealings with Russian industry, noting that Russian taxpayers are directly funding the war effort.