Lloyd Linn
Reuters, after talking with six economists and lawyers, described in its article a likely scenario for the Russian Federation’s actions in response to the seizure of its assets. The agency clarified that Moscow may confiscate financial assets and securities of foreign investors that are stored in special type-C accounts. Let’s get into the details.
EU countries fear Russia’s response to confiscation of its assets
Let us recall that in January 2022, RIA Novosti wrote that there are $288 billion in assets of Western companies in Russia. At the end of 2023, this amount had fallen to $215 billion, of which $98.3 billion was in Cyprus and $50.1 billion in the Netherlands. And on April 24 of this year, the US Senate approved a bill that includes the transfer of frozen Russian assets to Ukraine. At the same time, Bloomberg wrote that the European Central Bank, Germany and France feared Russia’s response to the confiscation of its assets.
At the end of April this year, Deputy Chairman of the Security Council of the Russian Federation Dmitry Medvedev said that in response to the possible seizure of Russian assets in the United States, it is necessary to prepare a law on the termination of property and non-property rights of private foreign investors. At the same time, the politician clarified that Moscow does not have “a significant amount of American state property.”
Control of subsidiaries and proposed government action
The Reuters story cited an opinion from an economic research fellow at the Hutchins Center. The scientist recalled that Russia has already gained control over many subsidiaries of Western companies — some of them were acquired by Russian structures at a discount of more than 50%.
According to Vladimir Yazev, investment portfolio manager at Aigenis, payments on blocked assets in type-C accounts could start to be seized in favor of the state. He also suggested that the Russian government may consider measures to block over-the-counter assets. Another agency interlocutor believes that assets could be confiscated if foreign investors refuse to take part in the exchange of assets. According to this scheme, blocked assets must be exchanged for Russian securities.
