Putin allows confiscation of American property in Russia for compensation of losses
Russian President Vladimir Putin has signed a decree allowing the seizure of American assets in Russia for “compensation of losses”. Russians are explained that this is a response to the freezing of Russian assets in the US. A special commission will look for property belonging to Americans.
“Decree No. 442 “On the special procedure for compensating losses inflicted on the Russian Federation and the Central Bank of the RF in connection with the unfriendly actions of the US” dated May 23 has been published on the official Kremlin portal.
According to this order, Russian property owners can sue for compensation at the expense of American property in Russia. After the court decision, the confiscation will be handled by the Government Commission for Control over Foreign Investments.
The commission will determine what specific property can be used for compensation:
- Movable and immovable property owned by the US or American individuals.
- Securities owned by the US or their citizens.
- Shares in the charter capital of Russian legal entities.
- Property rights owned by the US or their citizens.
The Russian government has to make appropriate amendments to the legislation within four months. The decree takes effect from May 23, 2024.
Frozen Russian assets
Since the beginning of Russia’s invasion of Ukraine, Western countries have blocked over 300 billion dollars of Russian assets, most of which are in the EU, and about 5 billion in the US.
The confiscation of these funds remains problematic due to fears of legal and reputational consequences, Western politicians remain rather indecisive.
Various options are proposed for granting these funds to Ukraine:
- The US is negotiating with allies about providing an additional $50 billion in aid to Ukraine, which will be covered by the profits from frozen Russian assets.
- The EU has agreed to use 90% of the revenues from frozen assets to purchase weapons for Ukraine. Moreover, the purchase of weapons can be done in any country, not just in Europe.
- 10% of the revenues will go towards Ukraine’s recovery after the aggression.
The EU has ultimately approved this idea on May 21. Ukraine will receive 3 billion euros in profits from Russian assets from the EU by July.
