World Economy

Bill on Foreign-Asset Freeze in Russia

Bill on Foreign-Asset Freeze in RussiaBill on Foreign-Asset Freeze in Russia

A member of Russia’s ruling party proposed a law that would allow the seizure of foreign states’ assets in the country after the US and its allies targeted President Vladimir Putin’s inner circle including a childhood friend with asset freezes and travel bans.

The draft seeks to benefit citizens or companies that had property outside Russia seized under an “unlawful” judgment from a foreign court, according to the State Duma’s website, Bloomberg reported Friday.

The government would use budget funds to compensate the victim, and the courts would have the right to go after foreign states’ assets in Russia, including property under diplomatic immunity, according to the proposal.

The EU and US have targeted individuals, companies and the finance, energy and defense industries to punish Russia for the annexation of Crimea in March, while accusing Putin of supporting a separatist insurgency in eastern Ukraine. Italy froze about 28 million euros ($36 million) of properties belonging to billionaire Arkady Rotenberg for his ties to Putin. The Kremlin denies arming or financing the rebels.

If the confrontation escalates, “we could see embassies targeted, but I don’t think they’ll go after assets and property” belonging to businesses, Oleg Kouzmin, an economist at Renaissance Capital in Moscow and a former monetary policy adviser at Russia’s central bank, said. “It’s all about geopolitics and I think it’s actually unlikely to happen.”

 Not Retaliating

Russia will use state funds to aid businesses hit by sanctions and isn’t considering retaliating further, Prime Minister Dmitry Medvedev said in an interview with state television channel Rossiya 24 on Sept. 20. The government is holding off discussing another round of tit-for-tat measures, he said, after Russia banned some food imports from the US, the EU, Norway, Canada and Australia last month before the latest wave of restrictions.