What Siluanov is talking about
Russian investors’ assets frozen by Western countries can be exchanged for foreign assets located in Russia. This was expressed by the Minister of Finance Anton Siluanov in an interview with Naila Asker-zade on the TV channel Rossiya-24.
In principle, on the one hand, it is theoretically possible. On the other hand, here we need to pass a series of legislative decisions that will allow us to use the frozen funds of foreign investors frozen in the Russian Federation for settlements on assets frozen abroad,” he said. said the Ministry of Finance.
The minister noted that such a change is currently in the early stages of evaluation. According to Siluanov, the scheme itself is quite complex, as the volume of frozen assets must be verified and appropriate approvals must be obtained to ensure that the interests of Russian and foreign investors are respected.
Also, the head of the Ministry of Finance said that Moscow is ready to replace Eurobonds with Russian bonds, the transactions of which became more complicated after the imposition of sanctions. However, this is also associated with difficulties.
“We are ready to move in this direction, but we act according to the prices established for these assets. That is, we determine the market value of Eurobonds, we are ready to issue rubles and make such swaps accordingly. But not everyone is happy with that today. Therefore, we are in a dialogue and the final decision is still being discussed,” he said.
How many Russian assets abroad are frozen
In the spring, the Ministry of Finance estimated the volume of assets frozen by the West at $300-350 billion, which is almost half of Russia’s gold and foreign exchange reserves. We are talking about monetary gold, debt securities, currency, the reserve position of the IMF. Legally, these funds still belong to the Russian Federation, but cannot be disposed of due to sanctions. In recent months, reports have become more frequent in Europe and the United States that these funds should be confiscated and directed towards the restoration of Ukraine. However, such actions have no precedent and legal basis yet.
Western countries are also unable to accurately name the amount of assets seized. In May, EU officials reported that they had frozen the assets of the Russian Central Bank for 23 billion euros.
Referring to an internal EU document, EU countries froze Russia’s assets with sanctions totaling 68 billion euros, according to November data from Politico magazine. The publication wrote that 50 billion Euros in Belgium and 5.5 billion Euros in Luxembourg were frozen. Together with Italy, Germany, Ireland, Austria and France, these countries account for 90% of all Russian assets frozen by the European Union.
In October, European Commission Justice Didier Reynders announced that Brussels had frozen the assets of the Russian business community for 17.4 billion euros, a similar assessment was made by EC representative Christian Wiegand. He explained that we are talking about 1,350 individuals and entities in assets falling under European sanctions – accounts, real estate, yachts and other luxury goods. The amount of funds seized in May is estimated to be around 10 billion Euros.
The same Reinders, in an interview with TASS at the end of September, said that if you collect the assets of Russian entrepreneurs arrested in the EU and G7 countries (i.e. the USA, the UK and Japan), then, according to a member of the European Commission, some EU countries apply the announced sanctions extremely limitedly. applies: Hungary, for example, froze the assets of the Russians for only 3,000 euros.
Washington reported more impressive amounts that are in line with the estimates of the Russian Ministry of Finance. At the end of June, US authorities announced that they had frozen $330 billion of Russia’s assets. $300 billion of these funds corresponded to the country’s gold and foreign exchange reserves, and $30 billion to the assets of sanctioned citizens and companies.
How many foreign entities are in Russia?
In March, immediately after the freeze on Russia’s assets abroad, Security Council Deputy Chairman Dmitry Medvedev warned that Moscow could launch a symmetrical response.
“Our answer is to nationalize the assets of foreign companies and individuals with hostile jurisdiction,” Medvedev said.
In November, when the UN General Assembly adopted a resolution on the need to create a mechanism for compensation to Ukraine, Medvedev reiterated that Moscow would then begin to confiscate property of foreign companies.
By various estimates, there are trillions of dollars worth of property, accounts and other assets of companies from unfriendly countries in Russia. According to the Central Bank, as of October 1, 2021, the total volume of foreign investment in the Russian economy reached 1.18 trillion dollars. More than half of these funds—$679 billion—are shares of the business. The other $392 billion is debt of all kinds: bonds, loans, trade advances. The rest is cash, deposits, IMF special drawing rights and other investments. These funds are effectively locked inside the country as authorities take protective measures to prevent capital from being withdrawn abroad in response to sanctions.
In May, State Duma Chairman Vyacheslav Volodin said that the Central Bank blocked about $500 billion of foreign investors’ funds in Russia in response to the freeze of Russian assets in the West.
In July, Alexei Timofeev, head of the National Association of Stockholders (NAUFOR), said Russia had frozen a total of $312 billion in non-residents’ assets in stocks and bonds.
Source: Gazeta
Ben Stock is a business analyst and writer for “Social Bites”. He offers insightful articles on the latest business news and developments, providing readers with a comprehensive understanding of the business world.