Putin Takes Steps To Seize Property Owned By U.S. Citizens And Companies

Last week, Russian President Vladimir Putin signed a decree that would allow Russia to claim U.S. assets in retaliation for any Russian assets confiscated in the U.S. This move comes as Group of Seven (G7) nations continue to negotiate how to leverage around $300 billion worth of sovereign Russian assets frozen in the West to aid Ukraine in its defense against Russia’s unprovoked invasion. 

The decree, which was signed as G7 finance ministers were beginning a meeting in Italy to discuss the frozen assets, states that any property, real estate, securities and stakes in Russian companies belonging to American companies and citizens could be confiscated to compensate for Russian losses from seizures in the U.S., according to Russia’s state-backed media.

Earlier this year, Russian state media claimed that the Kremlin had identified around $290 billion in U.S. and allied assets in Russia that could be targeted, although Reuters couldn’t independently verify those claims. Russia has already seized physical assets from several different Western companies and millions of dollars held by European banks in Russia. Since the start of the Ukraine invasion, thousands of foreign companies have left Russia, often having to sell their assets at huge discounts before doing so.

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The U.S. has proposed using revenue from some of the Russian assets to back $50 billion in aid to Ukraine, with German officials signaling their support for the proposal earlier last week. The European Union also formally adopted a plan last week to send Ukraine between $2.7-3.3 billion (2.5-3 billion euros) each year from interest generated by some of the frozen assets.

Congress passed, and President Biden signed, legislation that empowers Biden to seize Russian foreign exchange reserves in the U.S. under provisions of the Rebuilding Economic Prosperity and Opportunity for Ukrainians Act. A task force has identified at least $5 billion in Russian central bank assets in the U.S. banking system.

Putin’s decree is a significant escalation in the ongoing economic conflict between Russia and the West, as governments continue to grapple with the legal and financial implications of seizing Russian assets. The move is likely to further strain relations between Russia and the U.S., as well as other Western nations, and could potentially lead to retaliatory measures from both sides.

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