RuAssetsWatch: Monitoring Initiatives to Confiscate Russian Assets for the Recovery of Ukraine 

Detailed description of the situation and analysis – April 2023

—    Ukraine calls on its allies, primarily the United States, to take the lead in creating a special compensation mechanism and adopting appropriate legislation that would allow for the confiscation of frozen private and sovereign Russian assets.

—     Russia is blackmailing Ukraine’s allies by seizing the assets of Western companies in its territory – Putin issued a decree on the “temporary” management of the property owned by residents of the countries that Russia calls “unfriendly”. The first “victims” were the Russian assets of Uniper S.A. and Fortum.

—     The EU and G7 are still discussing the expansion of economic sanctions on Russia. The strengthening of sanctions should include additional measures to reduce Russia’s export revenues, tightening restrictions on exports to Russia and broader sanctions against Russian companies.

—     The International Working Group on Russian Sanctions (‘Yermak-McFaul Group’) presented a new document where experts focused on specific areas of increasing sanctions pressure. In particular, this includes further introduction of sanctions on the Russian energy sector and the defence industry, restrictions on the use of financial instruments and confiscation of assets of the Russian Central Bank and their transfer to Ukraine.

—     The U.S. has imposed sanctions against more than 120 legal entities and individuals in more than 20 countries and jurisdictions aimed at closing alternative ways of Russia financing its war machine. In coordination with the UK, the U.S. targeted the sanctions evasion network that supports Alisher Usmanov, one of Russia’s richest billionaires.

—     At the EU level, the European Parliament plans to adopt acts that, inter alia, provide for new due diligence rules for checking the identity of customers, what they own and their controllers. It also envisages the establishment of the EU-wide Anti-Money Laundering Authority (AMLA) with supervisory and investigative powers.

—     The U.S. Department of Justice is looking for new ways to stop evasion of sanctions by Russia, targeting foreign investment advisers, hedge funds, law firms and private equity managers. Andrew Adams, Director of the U.S. Department of Justice KleptoCapture Task Force, explained how they searched for Russian sanctioned assets.

—     The G7 ambassadors called on the Swiss Federal Council to conduct an in-depth search for the funds of Russian oligarchs and to participate in the international Russian Elites, Proxies, and Oligarchs (REPO) Task Force.

—     The Bank of Cyprus closed 10,000 Russian bank accounts after the U.S. and UK had imposed sanctions on Cypriot lawyers and accountants for helping oligarchs, including Roman Abramovich, and is setting up a national sanctions enforcement unit to work with the relevant UK department.

—     The Ministry of Justice of Ukraine cancelled the registration actions regarding the changes in the final beneficial owners of Smart Holding, Ukrgazvydobutok and Regal Petroleum Corporation (Ukraine) Limited of Vadym Novynskyi. In turn, the Prosecutor General’s Office seized the corporate rights of 40 companies, 30 gas wells and real estate for a total cost of over 3.5 billion UAH.

The material was prepared with the support of the International Renaissance Foundation within the framework of the project “Advocacy for the Green Recovery of Ukraine through Increased Support for Ukraine and Weakening of Russian Influence in the EU”. The material reflects the position of the authors and does not necessarily reflect the position of the International Renaissance Foundation.