By John Meyer, financial consultant – Eurasia Business News, April 18, 2022

View on the Leningradskiy Avenue, in the centre of Moscow, December 2021.
Photo credit : Swann Collins.

On April 8, the State Council of the Republic of Crimea submitted to the Federal State Duma a draft bill No. 103072-8 on the nationalization of property and assets that were, as of February 24, 2022, owned by states unfriendly to Russia or their citizens.

Changes are proposed to the article 235 of the Civil Code of the Russian Federation. The draft law provides for the possibility of forcible seizure of property rights and assets located in Russia and belonging as of February 24, 2022 to foreign states or persons associated with them who commit unfriendly actions against the Russian Federation, as well as their beneficiaries and persons who are under the control of these foreign persons, regardless of the place of their registration or the place of their primary business activities. 

The forced seizure of property is proposed to be carried out without payment of compensation. As indicated in the text of the bill, in particular, deputies are talking about property rights, which include movable and immovable property, cash, bank deposits, securities, corporate rights and other property (assets). In addition, the draft bill provides for empowering the Russian state authorities of the subjects of the Russian Federation (regions, autonomous republics, territories) with their own regulation to determine the procedure for the nationalization of property of “unfriendly foreign states”, as well as to determine the state authority of the subject of the Russian Federation authorized to make decisions on compulsory seizure.

The deputy head of the United Russia faction in the State Duma, Yevgeny Revenko, supported this initiative.

On April 11, the Chairman of the Russian State Duma sent the draft bill to the Committee on State Construction and Legislation.

This draft bill can recall the plans for the nationalization of the German subsidiaries of Gazprom and Rosneft in Germany, and, of course, the law already adopted in Ukraine providing for the nationalization of property rights and assets of Russian individuals and legal entities.

On March 7, the Russian government approved a list of “unfriendly foreign states and territories”. This list covers 48 countries, including the United States and the European Union :

  • Australia ;
  • Albania ;
  • Andorra ;
  • The United Kingdom ;
  • EU countries ;
  • Iceland ;
  • Canada ;
  • Liechtenstein ;
  • Micronesia ;
  • Monaco ;
  • New Zealand ;
  • Norway ;
  • The Republic of Korea ;
  • San Marino ;
  • North Macedonia ;
  • Singapore ;
  • The USA ;
  • Taiwan (China) ;
  • Ukraine ;
  • Montenegro ;
  • Switzerland ;
  • Japan.

The European list includes: Austria, Belgium, Bulgaria, Hungary, Germany, Greece, Denmark, Ireland, Spain, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Finland, France , Croatia, Czech Republic, Sweden and Estonia.

This move is an answer to the U.S. and European sanctions against Russian banks, companies, state organization and individuals. These Western restrictive measures have been unleashed after Russia started a military operation against Ukraine on February 24. In a televised address to Russian citizens, President Vladimir Putin stated that circumstances “require decisive and immediate action from us, the people’s republics of Donbass  have asked for help.” 

The Kremlin continues voicing that Moscow’s plans do not include the occupation of Ukrainian territories. The Russian goals would be “demilitarization and denazification” of the country.

Ukraine and its Western partners sees the Russian military operation as an invasion and imposed strong strong sanctions against Russian state officials, banks, companies and oligarchs, to put pressure on the Russian government and lead it to a ceasefire and a withdrawal from Ukraine.

Update to come.

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