Russia prepares to confiscate Western assets: Reuters reveals details
Photo: Russia prepares to confiscate Western assets (Getty Images)
Russia is preparing to confiscate frozen funds of foreign companies and investors. The corresponding draft law has already been approved by a government commission, Reuters reports.
According to the media outlet, citing two sources familiar with the draft law, Russia intends to expand its powers through new legislation that could allow it to confiscate frozen foreign assets.
"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 outlet reports.
The draft law, developed by the Russian Ministry of Justice, is a continuation of a decree signed by Kremlin leader Vladimir Putin in May 2024 concerning US property and securities that Russia may designate as compensation for any losses caused by the seizure of frozen Russian assets in the United States.
According to the news agency's sources, the new law will extend to all so-called "unfriendly states," those that have imposed sanctions against Russia over its war against Ukraine. The decisions will be enforced through lawsuits filed in arbitration courts by state bodies such as the Central Bank, the Prosecutor General’s Office, and government institutions. The defendants will be foreign states that have seized Russian assets.
"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," the article states.
Freezing of Russian assets and the Kremlin's response
In January 2024, it was reported that Russian authorities were leaning toward the view that the $300 billion in reserves frozen after the invasion of Ukraine were almost lost, but Russia was prepared to file lawsuits and take decisive retaliatory measures.
In particular, in May 2024, Reuters reported that Russia might target private investors' cash, as its ability to take similar retaliatory actions had been undermined by the reduction in foreign investments.
About $300 billion of Russian assets were frozen abroad shortly after Russia deployed troops to Ukraine during the large-scale invasion in February 2022.
