February 8, 2025
By Isaac Nsiah Foster
Russia is preparing to expand its power to seize foreign assets in response to western sanctions.
A new draft law currently under review would allow Moscow to confiscate the frozen funds of foreign companies and investors from countries it consider unfriendly.
After western nations froze around $300 billion in Russian Financial assets, including government bonds and major currencies following the Ukraine conflict, Russia is now taking steps to respond with its own legal measures.
The proposed legislation developed by Russia’s Justice Ministry has been approved by a key government commission.
This approval allows the Bill to be sent to the State Duma, the lower house of Parliament, for debate and potential passage into law.
If the Bill becomes law, Russian state bodies, including the Central Bank, the General Prosecutor’s Office and other government agencies will the authority to file lawsuits in arbitration courts to seize foreign assets in Russia.
These lawsuits will target countries that have frozen Russian assets. A key aspect of the legislation focuses on Type C accounts, which hold billions of dollars belonging to foreign investors. These accounts were created to store funds from foreign entities but access to them remains blocked unless specifically approved by Moscow.
If the law passes, these frozen funds could be taken as compensation for Russian losses. With limited foreign investment in Russia, Moscow’s ability to retaliate directly against western assets seizures has been shrinking.
This new law would give the government an additional tool to strike back against sanctions and economic restrictions imposed by the US and it’s allies as tensions between Russia and the west continue to escalate.
This legislation signals Moscow’s intent to counter western economic pressure with direct action. By seizing foreign assets, Russ aims to strengthen it’s financial position while sending a clear message that western sanctions will not go unanswered.