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

Detailed description of the situation and analysis – July 2023

• The EU took another step towards legislation on the introduction of criminal liability for violations and circumvention of sanctions. MEPs allowed the start of inter-institutional negotiations with the governments of the EU member states on the relevant directive. One of the initiatives of MEPs is that the assets confiscated under such criminal proceedings should be used for the reconstruction of Ukraine.
• Some of the partners are already taking measures to reduce the Russian presence in their economy – the Polish government appointed a temporary manager for the Russian oligarch Vyacheslav Kantor’s property in Grupa Azoty. Poland will look for a partner who will buy about 20% of the frozen shares and pay compensation. The country’s government believes this will ensure independence from Russian energy resources.
• In early July, the International Working Group on Russian Sanctions presented a new report aimed at limiting the access of the Russian military-industrial complex to Western technologies. The document contains convincing evidence of how critical missile components continue to get from Western countries to the Russian Federation, as well as recommendations on how to stop this process.
• The United States introduced new sanctions on a number of Russian enterprises working in the fields of the military-industrial complex, aerospace industry, quantum technologies and advanced computer technologies that the Russian Federation uses to support the defense industry, and more than a dozen scientific and research organizations, and also limited access to international financial system of a number of Russian banks.
• Canada’s new sanctions target Russian private military companies and leaders of Russia’s nuclear sector, as well as a number of individuals involved in the development, production and supply of Orlan-10 unmanned aerial vehicles. 
• Japan expanded its ban on vehicle exports to Russia from August 9 to include used cars under G7 sanctions. Japanese cars are in high demand in the Russian Federation, and the extended ban could strike another economic blow.
• The Kyiv School of Economics (KSE) conducted a study on the impact of sanctions on the Russian economy. Conclusion: sanctions are working, but the breaking point regarding the impossibility of waging an aggressive war against Ukraine is not yet visible. Moreover, the economy of the Russian Federation is close to full recovery after the initial shock: Russia is diversifying its oil and gas supplies and establishing new sales markets.
• In its research, the Atlantic Council confirms that a key vulnerability in the application of sanctions on Russia is a gap in beneficial ownership information, also in the case of oil price cap.
• According to the KSE calculations, for the 18 months of war against Ukraine, only about 10% of Western companies left Russia. However, due to the exit of Western business, Russian oligarchs got the opportunity to buy assets at huge discounts or practically for free. It is not surprising that Putin’s associates received the most attractive assets.
• Sense Bank (formerly Alfa Bank) became the property of the state, having passed the nationalization procedure, thereby increasing the government’s share in the banking sector, which was already about 60%. At the same time, the National Bank of Ukraine received letters from the former owners (Mikhail Fridman and Pyotr Aven) stating their intention to appeal the decision to withdraw the bank from the market, which triggered the nationalization procedure.
• Ukraine was still unable to confiscate all the assets of the sanctioned Russian oligarch Oleg Deripaska – the Appeal Chamber of the High Anti-Corruption Court disagreed with the Ministry of Justice’s evidence regarding the confiscation of Khustskyi and Zhezhelivskyi granite quarries.

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.