Russia's Legislative Strike: Targeting Frozen Foreign Funds

Russia is poised to pass new legislation enabling it to confiscate frozen assets of foreign investors as a retaliatory measure against Western asset seizures. This draft bill, developed by the justice ministry and approved by the legislative commission, awaits debate in the State Duma. It could affect large investors with trapped funds.

In a significant legislative move, Russia is preparing to expand its retaliatory powers against Western asset confiscations. Through a new draft law, Moscow seeks to seize the frozen assets of foreign companies and investors, according to sources informed on the matter.

After Russia's 2022 incursion into Ukraine, approximately $300 billion in Russian financial assets were frozen abroad. In response, the justice ministry has crafted a bill, now approved by the legislative activity commission, outlining a process for Russia to retake foreign property, mirroring actions by other states holding Russian assets. This development sets the stage for the draft to be reviewed in the State Duma.

Originating from a 2024 decree by President Vladimir Putin, the forthcoming law aims to target unfriendly states that have sanctioned Russia. Legal enforcement would involve lawsuits by state institutions against those seizing Russian assets, with type-C accounts potentially in the crosshairs, posing risks for foreign investors with funds tied up in Russia.

(With inputs from agencies.)