President Vladimir Putin on Thursday signed a decree that allows Moscow to take control of U.S. property as compensation for any seizure of frozen Russian assets in the United States.
Washington and its European allies seized or blocked around $300 billion of Russian financial assets shortly after the full-scale invasion of Ukraine.
In response to those punitive measures, Moscow moved the assets of many foreign investors to special accounts that cannot be transferred outside Russia without the Kremlin’s approval. Thursday’s decree instructs Russia’s state commission on monitoring foreign investment to determine the types of U.S. property a Russian rights holder could seek to confiscate through the court as “compensation” for assets frozen in the United States.
The decree listed real estate, personal property, securities, shares and property rights as potential U.S.-owned assets potentially liable for seizure.
Russia’s government was instructed to make the necessary legal changes allowing for the U.S. property seizures by the end of September.
Since invading Ukraine over two years ago, Moscow has threatened to confiscate the Russia-based assets of countries it considers to be “hostile.”
Last year, Putin gave the green light for a temporary state takeover of the Russian divisions of the German energy giant Uniper and Finland’s Fortum in response to the “unfriendly U.S. actions.”
His decree on Thursday comes a month after U.S. President Joe Biden signed into law critical military aid to Ukraine, which also contained provisions for Washington to sell confiscated Russian assets and hand the proceeds to Kyiv for its post-war reconstruction efforts.
Russia Seizes Deutsche Bank, UniCredit Assets
Earlier on 18th May, a Russian court has ruled that Deutsche Bank and UniCredit’s assets in Russia are to be seized, documents showed.
European banks have largely exited Russia after Moscow launched its offensive on Kyiv in 2022.
A court in St. Petersburg ruled in favor of seizing 239 million euros ($260 million) from Deutsche Bank, documents dated May 16 showed.
The same day, it ordered the seizure of around 463 million euros ($504 million) worth of assets belonging to Italy’s UniCredit.
Both decisions were issued in answer to a request from RusKhimAlians, which was planning to build a major gas processing and liquefaction plant in cooperation with German company Linde, which pulled out of the project due to Russia’s military assault.
RusKhimAlians sued UniCredit and Deutsche Bank — both guarantors of the project.
UniCredit was one of the European banks most exposed to Russia when Moscow started its 2022 campaign in Ukraine, with a large local subsidiary operating in the country.
It began preliminary discussions on a sale last year, but the talks haven’t advanced.
Chief executive Andrea Orcel said UniCredit wants to leave Russia, but said that gifting an operation worth 3 billion euros was not a good way to respect the spirit of Western sanctions on Moscow over the war.
Nevertheless, UniCredit has gradually reduced its exposure to Russia and managed to increase the ratio of its capital to risk-weighted assets to 16% from 15% last year.
