Russia to widen asset seizing power with new legislation, say sources
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A draft Bill detailing Russia’s process for seizing foreign property in retaliation for similar actions against its assets was approved by the government’s legislative commission this week.
PHOTO: REUTERS
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MOSCOW – Russia is set to widen its power to retaliate for Western asset seizures with new legislation that could allow it to confiscate the frozen funds of foreign companies and investors, two sources familiar with the draft law told Reuters.
Around US$300 billion (S$405 billion) of Russian financial assets, such as major currencies and government bonds, were frozen overseas shortly after Moscow despatched troops to Ukraine
A draft Bill outlining the procedure for Russia to confiscate foreign property in response to similar actions by other states with Russian assets was approved by the government’s legislative activity commission this week, paving the way for it to be debated in the State Duma, Russia’s Lower House of Parliament.
The Bill, developed by the Justice Ministry, follows on from a decree signed by President Vladimir Putin in May 2024 concerning the US property and securities Russia could identify as compensation for any losses sustained by the seizure of frozen Russian assets in the US.
The new law would widen that out to all so-called unfriendly states, those that have imposed sanctions against Russia over its actions in Ukraine, the sources said.
Decisions would be enforced through lawsuits filed at arbitration court by state bodies such as the central bank, general prosecutor’s office and government agencies. Defendants will be foreign states that have seized Russian assets.
A source familiar with discussions about the Bill said type-C accounts, access to which is blocked unless Moscow grants a waiver, may end up being targeted.
That could spell trouble for the many foreign investors, including both individuals and major US investment funds, with billions of dollars of funds trapped in those accounts.
Reuters reported in May 2024 that Russia may go after private investors‘ cash as its ability to mete out like-for-like retaliation has been eroded by dwindling foreign investment. REUTERS
