Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
Russia has indicated it has no immediate plans to seize European assets, including companies and banks, but stated it would reconsider this position if the European Union proceeds with the confiscation of frozen Russian sovereign assets. This declaration comes as EU leaders continue discussions on how to utilize approximately $250 billion worth of immobilized Russian funds to finance Ukraine’s defense and reconstruction efforts.
EU Deliberations on Frozen Assets
The European Union has frozen Russian assets totaling around $250 billion since the United States and its allies imposed sanctions following Russia’s full-scale invasion of Ukraine in February 2022. These assets belong to Russia’s central bank and finance ministry.
EU leaders are exploring mechanisms to use these frozen assets for Ukraine without direct confiscation. Legal complexities and concerns raised by the European Central Bank, alongside some EU member states, have made outright confiscation a challenging prospect.
Russia’s Conditional Stance
Russian Deputy Finance Minister Alexei Moiseev stated on Wednesday that Moscow would mirror the EU’s approach regarding these assets. He noted that Europe has thus far avoided outright confiscation.
“We are not confiscating anything yet. The Europeans haven’t called for confiscation, so we won’t confiscate anything until they do,” Moiseev told reporters. He added that if confiscation occurs, Russia would then consider its response.
Clarification on Privatisation Decree
Moiseev also addressed a recent presidential decree concerning the accelerated privatisation of state-held assets, clarifying that it is not linked to plans to seize European assets. President Vladimir Putin’s decree appointed PSB, a bank under Western sanctions that serves the military-industrial complex, as the government’s agent for state property sales.
The decree introduced an accelerated sale mechanism, requiring asset valuation within 10 days of a contract’s signing and faster property rights registration. While the decree text cited “unfriendly” actions by the U.S. and its allies as justification, sparking speculation of retaliatory measures, Moiseev dismissed this interpretation.
He affirmed that private European companies and banks still operating in Russia have not been seized by the state and are therefore not subject to the new privatisation decree. Moiseev clarified that the decree’s true purpose is to create an additional channel for property sales.
Context of Asset Seizures in Russia
Since the beginning of what Moscow terms its “special military operation” in Ukraine, Russian authorities have seized assets worth approximately $50 billion. This includes assets of Western companies that have exited the Russian market.
Additionally, major domestic companies have changed hands due to corruption claims, alleged privatisation violations, or poor management. These nationalisations represent the most significant property redistribution in Russia since the 1990s, when Soviet state assets were privatized.
Outlook on Asset Management
Russian government officials have pledged to swiftly find new private owners for these seized assets. Moiseev underscored the urgency, stating, “There are many assets and they need to be sold quickly.”
The ongoing discussions in the EU about utilizing frozen Russian assets, coupled with Russia’s conditional stance and its internal asset management strategies, highlight the complex economic and geopolitical repercussions of the conflict in Ukraine.
