The President of the Russian Federation Vladimir Putin signs a decree allowing citizens of unfriendly countries to swap frozen funds for blocked Russian assets abroad. The decree applies to securities held on NSD's accounts with foreign depositories.
Under the decree, Russia will allow citizens of unfriendly countries to buy blocked Russian securities held abroad by using funds from special type C accounts in Russia. This refers so far to asset swamps amounting to 100,000 RUB (around 1,100 USD) per investor. The owner of the Type C account, typically a foreign company, will then have the option of receiving a foreign share abroad that was owned by a Russian investor. Russia plans to unblock accounts worth about 100 billion rubles in the first phase.
The terms of auctions to perform relevant transactions will be set by the Government Commission on Monitoring Foreign Investment. The Central Bank of the Russian Federation will regulate the swap procedure. This procedure is voluntary not only for Russian investors, but also for foreigners with funds in type C accounts. This new measure will allow foreign investors to utilize their frozen funds in Russia to acquire assets that were previously off-limits to them.
According to the decree, swap transactions with non-residents no longer need to be agreed upon with the Government Commission.
Nadmitov, Ivanov & Partners Law Firm advises on Western sanctions and Russian counter-sanctions.
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