Russia prepares nationalization of foreign assets: in response to EU actions

Plan for the nationalization of property in Moscow in response to the EU decision

According to hvylya.net: Moscow is preparing to quickly nationalize foreign property through the buyout of assets via a special procedure. This decision was made in accordance with the European Union's resolution to use the frozen funds to finance Ukraine. This was reported by Bloomberg agency, citing President Putin's decree.

The document provides for an accelerated scheme for valuating the confiscated property within 10 days and quickly formalizing ownership rights. The state bank 'Promsvyazbank' will be obliged to finalize the transactions. The decision was made during discussions on a plan to allocate loans to Ukraine amounting to €140 billion from funds that were frozen by the European Union, at a meeting of EU leaders in Denmark.

The assets of Western companies operating in Russia, including UniCredit, Raiffeisen Bank, PepsiCo, and Mondelez, are at risk of confiscation.

Since the beginning of 2022, the Russian authorities have already confiscated the assets of foreign companies valued at over 3.9 trillion rubles, approximately $48 billion. The proceeds are used to fund the federal budget.

Financial assistance to Ukraine from the European Union

The European Union is developing mechanisms for financial assistance to Ukraine. A 'reparatory loan' of up to €130 billion is planned, however, the final amount of funding will be determined after the IMF's assessment of the country's financial assistance needs for 2026-2027. Currently, about €210 billion of Russian assets are frozen in Europe, of which €175 billion are in cash form in the accounts of the Belgian depository Euroclear.

The European Commission has already proposed a mechanism for using Russian assets to support Ukraine without direct confiscation. This will allow the replacement of funds from deposits in the European Central Bank with EU bonds while maintaining the legal immunity of Russian assets, thereby directing them to Ukraine for financial assistance.

The plan for the nationalization of property in Moscow in response to the EU decision anticipates the rapid seizure of foreign assets and their realization to finance Ukraine. Ukraine may also receive financial assistance from the EU to support the country's needs in the coming years.