Russia Drafts Plan to Seize Assets If EU Acts on Funds

  Russia may nationalize and swiftly sell off foreign-owned assets under a new privatization mechanism in retaliation for any European moves to seize Russian holdings abroad, according to a person close to the government. 

President Vladimir Putin on Tuesday signed an order allowing for fast-track sales of state-owned assets under a special procedure.

The decree is intended to speed up the sale of various companies, both Russian and foreign, the person familiar with the matter said, asking not to be identified because the information isn’t public. Should the European Union begin seizing Russian assets, Moscow may respond with symmetrical measures, the person said.  

Hundreds of western companies working in sectors from banking to consumer goods still operate in Russia, including UniCredit SpA, Raiffeisen Bank International AG, PepsiCo Inc, and Mondelez International Inc. 

Putin acted as EU leaders meeting in Denmark build momentum for a plan to provide Ukraine with €140 billion ($164 billion) in loans from immobilized Russian central bank assets, ahead of a formal summit at the end of this month. The long-standing proposal to leverage the assets has gained traction after the US under President Donald Trump halted its direct support for Ukraine, leaving Europe to shoulder the burden of aiding the war-battered nation in its defense against Russia’s invasion. 

“In case of seizure, there will be a response,” Kremlin spokesman Dmitry Peskov said Thursday, replying to a request for comment. On Wednesday, he called the EU asset plan an “illegal seizure of Russian property, theft.” 

The EU has proposed a plan that wouldn’t amount to seizing the assets and Russia’s claims should they arise in future would be guaranteed, Bloomberg previously reported. Moscow would get the funds back if it agrees to compensate Ukraine for the damage the war has caused.

The Russian decree limits pre-sale valuations to 10 days and speeds up state registration of ownership, according to the document published on the government’s website. State-owned Promsvyazbank PJSC was appointed to handle such deals, and Putin’s order emphasized that the changes were a response to sanctions against Russia.

Putin has warned that the global financial order would be undermined if the West moved to seize Russia’s frozen state reserves abroad that were blocked in response to his February 2022 invasion of Ukraine. 

The new decree could also be used to sell off assets once owned by Russian investors. The Kremlin has stepped up seizures targeting Russian citizens including those with foreign passports or who’ve been accused of extremism or corruption. 

Properties are often resold to new owners to raise funds for the state budget.

The total value of confiscated property since 2022 reached 3.9 trillion rubles ($48 billion) as of June, according to estimates from Nektorov, Saveliev & Partners, a law firm in Moscow.

So far, Russia has refrained from nationalizing assets belonging to international corporations. Instead, it has acted to take some companies into temporary management prior to arranging sales to preferred buyers at steep discounts.