The Russian Federation intends to pass a law that would allow it to seize frozen assets of foreign companies. Moscow is considering such a move in response to Western actions regarding $300 billion in Russian assets.
Points of attention
- Russia is planning to pass a law allowing the confiscation of frozen assets of foreign companies in retaliation to Western sanctions on Russian assets.
- The bill proposes resolving claims in arbitration court by state bodies, which poses challenges for foreign investors operating in Russia.
- The law would apply to states that have imposed sanctions against Russia in light of its invasion of Ukraine, potentially affecting foreign investors and international relations.
- Foreign investors, including American investment funds, may face difficulties due to the possible confiscation of assets, especially in type C accounts for transactions involving foreign currency.
- The proposed bill, expected to be discussed in the Russian State Duma, reflects Moscow's response to the seizure of frozen Russian assets in the United States and its broader geopolitical strategy.
Foreign assets are under threat in Russia
In the Russian Federation, the government commission for legislative activity has approved a bill that defines the procedure for confiscating foreign property in response to similar actions by other states with Russian assets.
Now this proposal is to be discussed in the Russian State Duma.
The bill was developed in development of the decree signed by illegitimate Russian President Vladimir Putin in May 2024 on American property and securities, which Russia can determine as compensation for any losses incurred as a result of the seizure of frozen Russian assets in the United States.
According to sources, the new law will apply to all states that have imposed sanctions against Russia in connection with its full-scale invasion of Ukraine.
The decisions will be enforced on claims filed with the arbitration court by state bodies, such as the Central Bank, the Prosecutor General's Office, and state institutions. The defendants will be foreign states that have seized Russian assets.
According to the source, type C accounts, which are intended for transactions involving the purchase and sale of foreign currency by a non-resident for currency, may be affected.
This could spell trouble for foreign investors, including individuals and large American investment funds, whose billions of dollars have been locked up in these accounts.
