The seizure of Russian assets has proven slow and complicated
The European Commission’s “Freeze and Confiscate” working group, set up to ensure EU-wide coordination on the implementation of sanctions against listed Russian and Belarusian oligarchs, has intensified its action internationally.
It will work together with the newly established working group “Russian Elites, Proxies and Oligarchs (REPO)”, in which the EU works together with its countries GRAM7, Canada, France, Germany, Italy, Japan, the United Kingdom and the United States, as well as Australia.
Cooperation between the European Task Force “Freeze and Seize” and the international Task Force “REPO” is essential to guarantee the effectiveness of the sanctions imposed on both sides of the Atlantic. The Commission is committed to working closely and coordinating with its partners to ensure effective cooperation at global level.
But for its part, Ukraine, as part of its economic response to the Russian invasion, has imposed sanctions on Russia.
Ukraine hopes to start selling seized Russian assets this year through privatization auctions to help finance reconstruction efforts, the head of the State Property Fund said.
As part of its economic response to the Russian invasion, kyiv imposed sanctions on Russia and opened legal proceedings to seize Russian state assets in Ukraine and businessmen close to the Kremlin.
“Russian companies in some industries were a major player in the market, some say they had a large market share. But no one has calculated the exact value of these assets.“, the head of the real estate fund, Rustem Umerov, told Reuters, adding:
“Our goal is to take them all under state ownership, prepare and sell them. We want these companies to work for the Ukrainian state, for Ukrainian citizens.».
Tracing all Russian assets in Ukraine is a long and complicated process involving various government and law enforcement agencies. This year the fund wants to sell up to 102 assets, mainly real estate and cars.
“They can only be transferred to the state assets fund when a court order has been issued for the confiscated and nationalized assets. Now it is necessary to transfer them so that the state can sell the property right to a new owner without legal complications in the process.Umerov said.
“We are working on it now. We call it preparing for privatization. I asked my colleagues to do it in the second quarter, and by the end of the second, the beginning of the third quarter, we’ll already be ready to sell these assets.».
President Zelensky also issued decrees sanctioning hundreds of Russian citizens, including oligarchs whose assets are among the largest in Ukraine, for alleged links to the Russian invasion last February.
These decrees authorize Ukraine to file lawsuits to seize assets owned by Russians under sanctions. However, the process requires the approval of various government agencies and often faces opposition from property owners, who are trying to find loopholes to preserve their assets.
“When they start fighting us in court, they list so many legal entities that we get confused.“Umerov says.
As an example of the fund’s work, it was the Demurinsky extraction and processing plant, the world’s largest producer of titanium for the aerospace industry, which was seized by a Russian businessman in February.
Production at the company, which employs 284 people, has been partially restored and the fund expects to sell it this year.
Also, for the first time, US Attorney General Merrick Garland transferred the seized assets of a Russian oligarch to Ukraine for future reconstruction efforts in the war-torn country.
The Financial Times reports that the transfer took place earlier this year. Garland said more such transfers are to come.
“While this represents the first transfer by the United States of confiscated Russian funds to rebuild Ukraine, it will not be the last.“, he said.
Ukraine could cost at least $411 billion to rebuild over the next ten years, the World Bank said in a March report. The data should be considered as “minimal, as needs will continue to increase as the war continues” the report said.
It appears that post-war plans are already being drawn up and Western banking elites are already circling the war-torn Eastern European country for multi-billion dollar reconstruction investments.