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Putin allows seizure of Americans’ assets if US confiscates Russian holdings

Putin allows seizure of Americans’ assets if US confiscates Russian holdings
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President Vladimir Putin has signed a decree allowing Russia to confiscate assets of US companies and individuals to compensate for any Russian assets confiscated in the United States.

The decree was published on the Russian government’s legal portal on Thursday as top finance officials from the Group of Seven industrialised nations began a meeting at which the question of what to do with Russian assets frozen in the West is at the top of the agenda.

G7 negotiators have been discussing for weeks how to best exploit some US$300 billion worth of Russian financial assets, such as major currencies and government bonds, which were frozen shortly after Moscow invaded Ukraine in February 2022.

The funds would back financial aid to Ukraine. The proposal could generate as much as US$50 billion in critical financing for Kyiv and help shield it from political shifts on both sides in the US and in Europe.

G7 leaders are due to make a final decision at a June 13-15 summit. While the US and its allies are closing in on the broad strokes of the agreement, many critical details are still being negotiated and would need to be agreed upon, according to people familiar with the discussions, asking not to be identified as the talks are private and ongoing.

Russia’s ability to mete out like-for-like retaliation if Western leaders seize its frozen assets has been eroded by dwindling foreign investment, but it may go after private investors’ cash instead, officials and economists told Reuters this month.

Thursday’s decree stated that a Russian entity can ask a Russian court to determine whether its property has been unjustifiably seized and seek compensation.

The court would then order for compensation to be transferred in the form of US assets or property in Russia from a list that would be drawn up by Russia’s government commission on foreign asset sales.

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The decree listed securities, stakes in Russian companies, real estate, movable property and property rights among the US-owned assets potentially liable for seizure.

Former president Dmitry Medvedev acknowledged last month that Russia holds an insignificant amount of American state property and that any response Russia makes would be asymmetrical, focusing on private individuals’ assets.

The assets of many foreign investors, including both individuals and major US investment funds, are held in special ‘type-C’ accounts Russia introduced shortly after sending its army into Ukraine and being hit by a barrage of Western sanctions in February 2022.

Money in those accounts cannot be transferred out of Russia without permission from Russian authorities.

Washington has passed legislation allowing President Joe Biden’s administration to confiscate Russian assets held in American banks and transfer them to Ukraine, something Russia has repeatedly called illegal.

Additional reporting by Bloomberg, Associated Press

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