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

Detailed description of the situation and analysis – August 2023

• The European Commission is ready to make a legal proposal on the use of frozen Russian assets, taking into account the positions of EU member states.
• Atlantic Council experts argue for the need to confiscate sanctioned Russian public and private assets, also arguing that the asset confiscation programme is justified on legal, moral, and political grounds, and that there are already many multilateral mechanisms for such action.
• The EU Council has imposed new sanctions on 38 individuals and 3 legal entities from Belarus in connection with the country’s involvement in Russian aggression against Ukraine. In particular, the sanctions include bans on exporting firearms, aviation, and space industry products. The EU candidate countries, such as North Macedonia, Montenegro, Albania, Ukraine, and Bosnia and Herzegovina, have also joined these sanctions.
• Switzerland is strengthening control over sanctions enforcement. The State Secretariat for Economic Affairs (SECO) announced the establishment of a new Centre for Export Control and Sanctions. The new SECO department was established amid news that Swiss companies continue to do business in Russia and trade in Russian raw materials.
• The EU is set to import record volumes of liquefied natural gas from Russia this year, despite the bloc’s commitment to phase out Russian fossil fuels by 2027.
• According to the report of the International Working Group on Russian Sanctions (the “YermakMcFaul Group”), the main supplier of critical components for Russian drones is China, which accounts for 67% of shipments, with 17% of them going through Hong Kong. Turkey and the United Arab Emirates account for 5% and 2% of components, respectively. The drones also contained components made in Japan, the Republic of Korea, Switzerland and other countries, including processors, chips, transistors and other vital components.
• The U.S. Department of Justice is investigating Charles McGonigal, a former Special Agent in Charge, who pleaded guilty to conspiring with the sanctioned Russian oligarch Oleg Deripaska and violating US sanctions.
• The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced new sanctions on the shareholders of Alfa Group, one of Russia’s largest financial and investment consortia, – Aven, Friedman, Khan and Kuzmichev. These individuals were previously sanctioned by Australia, Canada, the EU, New Zealand and the UK.
• The Government of Ukraine approved the Asset Recovery Strategy for 2023-2025 developed by the Asset Recovery and Management Agency. The Strategy will determine the policy on the introduction of a comprehensive model for the recovery of illicit assets to Ukraine.
• Due to a lack of potential buyers, the first auction on sale of sanctioned property, at which the State Property Fund of Ukraine planned to sell the agricultural company Investagro (previously owned by the sanctioned Russian oligarch Mikhail Shelkov), did not take place.
• According to analysts of the Trap Aggressor project, there are still commercial companies in Ukraine, directly or indirectly owned by 25 TOP Russian oligarchs associated with the Kremlin’s military-industrial complex, that have not yet been confiscated.
• The National Agency for Corruption Prevention of Ukraine has created a database of artworks linked to sanctioned Russians and hopes that the portal will “make it more difficult for Russian oligarchs to sell such assets”, which are still too easy to hide and use for money laundering.

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.