Putin Signs Decree Accelerating Confiscation of Foreign Companies« Assets in Russia 0 25

The Kremlin plans to mass confiscate foreign assets in Russia, for which President Vladimir Putin has signed a decree that will expedite the sale of Russian and foreign companies under a new privatization mechanism.

This was reported by the news agency Bloomberg, citing a source close to the Russian government. The source stated that the Kremlin is taking such measures in response to Western sanctions.

These days, the EU is discussing the possibility of using the frozen reserves of the Central Bank of Russia to assist Ukraine, which is defending itself against Russian military aggression. Approximately $200 billion of Russian state assets are frozen in European countries.

Hundreds of Western companies continue to operate in Russia, despite many having suspended their business after Russia's full-scale invasion of Ukraine in February 2022. Among the companies that remain are UniCredit, Raiffeisen Bank International, PepsiCo, and Mondelez International.

According to Bloomberg, Putin's decree reduces the pre-sale assessment of assets to 10 days and accelerates the state registration of ownership rights, with the state-owned Promsvyazbank responsible for the transactions.

On Thursday, the official representative of the Russian Foreign Ministry, Maria Zakharova, called the EU's plans regarding frozen Russian assets "blatant theft." She stated that "Russia has a sufficient arsenal of countermeasures and capabilities for an appropriate political and economic response." The press secretary of the President of Russia, Dmitry Peskov, previously stated that "Russia will respond in terms of safeguarding its interests."

Commenting on media reports about Putin's decree, European Commission representative Balazs Ujvari said that the EC "is aware of reports about preparations in Russia for mass confiscation of Western assets, and we are closely monitoring them." He emphasized that he considers possible retaliatory measures from the Kremlin to be unjust, as the EU plans to use only Russian state assets, while Putin's decree allows for the seizure of assets that are private property of Western companies.

The independent Russian-language publication The Insider quotes economist Tatyana Mikhailova, who notes that through mass confiscation of the remaining foreign assets, the Kremlin will not be able to deliver a significant blow to Western businesses:

"The Russian authorities have already effectively confiscated the property of the departing companies. And what property can be confiscated, for example, from UniCredit and Raiffeisen? Accounts? And companies whose assets are under temporary management have surely already said goodbye to them. So it definitely won't amount to hundreds of billions of dollars."