Russian investors seeking to unlock EU-frozen assets could develop a new scheme to do so.
Points of attention
- Russian investors are utilizing a new scheme to unblock frozen assets in the EU without the necessity of opening accounts in Europe.
- Cooperation with European brokers who have the status of controlled foreign companies enables Russian oligarchs to bypass sanctions restrictions effectively.
- The process may be delayed by the need for additional licenses from US regulatory authorities, adding complexity to the asset unlocking scheme.
- The new strategy offers a quicker and more cost-effective way for Russian investors to regain access to their frozen assets in Europe.
- This innovative scheme showcases how Russian investors are leveraging legal loopholes to circumvent sanctions and unlock their assets in the EU.
What is known about the new strategy of the Russian Federation to unblock frozen assets in the EU
According to UNIAN journalists citing sources among Russian investors and financiers, the new scheme enables Russian oligarchs to sell their own frozen assets to European brokers without opening accounts and significantly simplifies the circumvention of a large number of restrictions within the framework of European sanctions.
It is emphasized that the owners of frozen Russian assets are discussing a method that allows to unlock the assets without having a European passport, residence permit or even a bank account in Europe.
It is noted that the key element of the new scheme is interaction with European brokers that have the status of controlled foreign companies.
This status allows brokerage companies to partially belong to Russian tax residents and creates a unique legal opportunity to bypass a number of sanctions restrictions from the EU.
In particular, these brokerage companies are able to buy frozen assets and cash from Russian owners by means of special agreements.
It is noted that the effectiveness of this scheme is ensured by the fact that such brokerage companies have an intermediate status between Russian and European jurisdictions and can act more flexibly under the conditions of European sanctions.
Thanks to this scheme, Russian investors get a significantly simplified way to unlock their own assets frozen in the EU without having a European passport, residence permit or bank account in the EU.
The article emphasizes that currently even those who did not have any formal relations with European countries can take advantage of this opportunity.
The scheme is implemented in 2 stages. In particular, the investor first signs a contract with a broker and the broker receives a license from the Belgian Treasury.
This license is the official permission to carry out the operation and the key element of the legalization of the whole process.
At the same time, investors do not need to contact the Russian government commission for the control of foreign investments.
Obtaining a license from the Belgian Treasury allows you to activate the process of transferring assets.
The broker initiates the procedure for transferring securities from the National Settlement Depository (NRD) to the European depository Euroclear.
At this stage, assets are removed from Russian jurisdiction and sanctions restrictions.
Euroclear receives a payment order from the broker company together with the obtained license and receives permission for the transfer of blocked funds or securities.
What difficulties exist in the new scheme for unlocking Russian assets frozen in the EU
The publication emphasizes that the process may be complicated by an additional requirement.
In particular, due to the presence of the Moscow Exchange group under US sanctions, Euroclear may require an additional license from the US Office of Foreign Assets Control.
This complicates the process and makes it longer.
However, even with this additional step, the new scheme remains more accessible and efficient for many Russian investors compared to traditional methods.
This new scheme to unblock the assets of Russian investors in Europe demonstrates how the Russians use the nuances of the legal systems of European countries to find loopholes to circumvent sanctions in the heart of the EU. Using brokers with KIK status and bypassing the need for European citizenship or accounts, investors from a terrorist country found a way to regain access to their funds, which should be blocked and work for the benefit of Ukraine, the authors of the material emphasize.
