Russian authorities announced plans to begin exchanging frozen assets

The government and the Bank of Russia have prepared a draft decree on unblocking part of the assets of foreign investors in exchange for blocked assets of Russians. This was announced by Russian Finance Minister Anton Siluanov at a meeting of the Council for Strategic Development and National Projects, RBC reports .

According to Siluanov, the assets of more than 3.5 million Russians worth 1.5 trillion rubles are currently blocked abroad.

"And taking into account the decisions you supported, we envisage the beginning of the exchange of assets of our citizens for assets of foreign investors, which are currently accumulated in type "C" accounts. At the first stage, we plan to unblock accounts of about 100 billion rubles, subject to retail investors," Siluanov said, addressing President Vladimir Putin.

In June, the head of the Central Bank, Elvira Nabiullina, said that the regulator was considering various options for exchanging investors' assets that are frozen in Russia and the EU. "In principle, we believe that an exchange of frozen assets is possible, but only within the framework of an exchange. Because while assets are frozen on both sides, they are not confiscated," she said.

One of the heads of the Delcredere Bar Association, Andrey Timchuk, in a conversation with Forbes called the exchange of blocked assets between Russian and foreign investors unlikely. According to him, this would require permission from foreign regulators, who would be guided by sanctions legislation. In particular, it would be necessary to prove that the Russian investor claiming the exchange of assets is not acting in the interests of sanctioned persons.

• In February 2023, Bloomberg wrote that “a pile of money” in the form of stock dividends, bond coupons, and assets that Western investors failed to sell before the full-scale war in Ukraine began is “stuck in a sanctions trap” and cannot be moved out of Russia. The money belongs to major investment firms, including JPMorgan Asset Management and Schroders Plc. Most of them privately admit that there is no hope of getting it back, because as soon as there is talk of repatriating dividends or accessing securities, everything “comes down to sanctions.”
• In the eighth package of sanctions against Russia, the European Union has provided conditions for unblocking the assets of Russian investors. According to the document, the competent EU authorities may allow the unfreezing of certain funds if they deem it necessary and under conditions that they deem applicable.