Russia Prepares to Seize Foreign Investors' Assets in Retaliation: Experts

Russia may retaliate against the confiscation of its frozen assets in the West by seizing financial assets and securities of foreign investors currently held in special «C» accounts, Reuters reports, citing six economists, lawyers, and experts. The interviewees believe this scenario is the most likely. «Payments on blocked assets in C accounts may begin to be confiscated in favor of the state», - said Vladimir Yazev, managing investment portfolio at Aigenis. He also does not rule out the blocking of over-the-counter assets belonging to unfriendly countries, including taxes, grants, and private donations. According to a Russian lawyer, if non-residents refuse to participate in the asset exchange, the only remaining option will be confiscation or enforcement.

According to a decree signed by President Vladimir Putin in November 2023, foreign investors can purchase foreign securities of Russians from money in «C» accounts that have been blocked due to sanctions against the National Settlement Depository. The broker «Investment Chamber» has been appointed as the organizer of the trades, during which non-residents will have the right to purchase frozen foreign securities of Russian investors, the Ministry of Finance reported in March. In November 2022, the Central Bank reported that over 280 billion rubles were blocked in «C» accounts. Deputy Finance Minister Alexei Moiseev said that the volume of frozen assets in «C» accounts is «comparable» to the volume of blocked Russian assets. As of the end of March 2023 (the latest available data from the Central Bank), the total amount of liquid funds in such accounts was estimated at 500 billion rubles.



Last week, the US Senate approved a $61 billion bill for military aid to Ukraine, which also included proposals to use frozen Russian assets worth $4−5 billion. The EU, in turn, intends to use the proceeds from Russia’s blocked assets to help Kyiv. The Kremlin stated that the confiscation of Russian assets would be a «solid nail in the future coffin of the entire Western economic coordinate system», - as well as «subject to certain retaliatory actions and legal proceedings». According to Valentina Matviyenko, speaker of the Federation Council, Russia has a «prepared response». Deputy Chairman of the Security Council Dmitry Medvedev, speaking about the response to the seizure of Russian assets by the US, admitted that Moscow does not have enough.