MOSCOW: Russia will now have jurisdiction over American property in Russia to compensate for damages from the seizure of Russian assets in the United States, according to a decree of Russian President Vladimir Putin on the procedure for compensating damage to Russia from unfriendly actions of the United States.
As part of the move, movable and immovable property of the United States, American companies and citizens on the territory of Russia, as well as securities owned by them, shares in the authorized capital of Russian companies and other property rights of the United States and Americans in the country will be subject to seizure.
Under the decree, the Russian copyright holder (in this case – Russian government or the Central Bank) has the right to “apply to the court <…> with a claim to establish the fact of unjustified deprivation of his rights to property due to a decision by a US state or judicial authority and to receive compensation for said damage.”
If the application is accepted, the court sends the request to the government commission for control over foreign investment. The commission makes a list of American property that, “taking into account the principle of proportionality, can be used” to compensate for damage from the seizure of Russian assets in the United States.
“The decision [of the court] on establishing the fact of an unjustified deprivation of the Russian copyright holder of rights to property and on compensation for damages provides for the termination of rights of the United States or a US citizen to property included in the list, and the subsequent transfer of these rights to the Russian copyright holder to compensate for the damage,” the decree says.
The Russian government can determine which governing body will be authorized to file an application with the court. The President also instructed the government to ensure – within a 4-month period – introduction of changes to the legislation aimed at implementing his decree.
On situation with Russian assets
International reserves, which are highly liquid foreign assets at the disposal of the Bank of Russia and the Russian government, consist of funds in foreign currency, special drawing rights, a reserve position in the IMF and monetary gold. After Russia launched its special operation in Ukraine, Western countries imposed sanctions against the Bank of Russia. In addition to freezing the country’s gold and foreign exchange reserves, all transactions related to the management of reserves and assets of the Central Bank, as well as transactions with any legal entity, organization or body acting on behalf of or by the order of the Central Bank, were prohibited.
