What Siluanov is saying
Russian investors’ assets that Western countries froze may potentially be swapped for foreign assets located inside Russia. This stance was shared by Finance Minister Anton Siluanov in an interview with Naila Asker-zade on the Rossiya-24 channel.
In principle, the idea is possible, yet it requires passing a series of legislative steps to enable the use of frozen funds held abroad for settling assets that are themselves frozen abroad, according to the Ministry of Finance.
The minister noted that the concept is currently in the early stages of assessment. He explained that the arrangement is intricate: the volume of frozen assets must be verified and the necessary approvals obtained to safeguard the interests of both Russian and foreign investors.
Siluanov also mentioned that Moscow is open to substituting Eurobonds with Russian bonds, a shift made more challenging by sanctions. He emphasized that while this option is on the table, it comes with difficulties.
“We are prepared to move in this direction, but we follow the prices set for these assets. We determine the market value of Eurobonds, we are ready to issue rubles and conduct such swaps accordingly. Yet not everyone is satisfied with that today. Dialogues are ongoing and a final decision is still under discussion,” he said.
How many Russian assets abroad are frozen
In the spring, the Ministry of Finance estimated that Western sanctions froze about $300-350 billion in assets, roughly half of Russia’s gold and foreign exchange reserves. This includes monetary gold, debt securities, currency holdings, and the IMF reserve position. Legally these funds still belong to Russia, but sanctions prevent their disposal. In recent months, reports from Europe and the United States have suggested these funds could be confiscated to aid Ukraine, though such actions have no established legal precedent or basis.
Western authorities have also faced difficulty naming the exact amount seized. In May, EU officials reported blocking 23 billion euros of Russian Central Bank assets. A Politico article citing internal EU documents noted sanctions totaling 68 billion euros by November, with 50 billion euros in Belgium and 5.5 billion euros in Luxembourg frozen. When combined with other countries like Italy, Germany, Ireland, Austria, and France, these figures account for most of the Russian assets frozen by the European Union. An October announcement from the European Commission and the Justice Department indicated assets of Russian businesspeople totaling around 17.4 billion euros, with a similar estimate from EC representatives, covering about 1,350 individuals and entities. The May assessment placed frozen funds at about 10 billion euros. In a separate interview with TASS, Didier Reynders noted that some EU nations apply sanctions only sparingly, giving Hungary as an example with frozen assets of just 3,000 euros. Washington has reported higher figures, stating that by the end of June, about $330 billion of Russia’s assets were frozen, with $300 billion tied to gold and foreign reserves and $30 billion to assets of sanctioned individuals and companies.
How many foreign entities are in Russia?
In March, following the initial freeze on Russia’s assets abroad, Security Council deputy chairman Dmitry Medvedev warned Moscow could respond in kind. He suggested nationalizing the assets of foreign companies and individuals with hostile jurisdictions as a countermeasure. Later, during a UN General Assembly resolution on compensation for Ukraine, Medvedev reiterated that Moscow could seize property belonging to foreign firms. Estimates vary, but trillions of dollars in foreign assets—encompassing property, accounts, and other holdings from countries considered unfriendly—are said to be present in Russia. The Central Bank reports that as of October 1, 2021, total foreign investment in the Russian economy reached about $1.18 trillion, with roughly $679 billion in equity and $392 billion in debt instruments, while the rest covered cash, deposits, IMF special drawing rights, and other investments. Authorities have taken protective steps to shield these funds from capital flight in response to sanctions.
In May, Vyacheslav Volodin, the State Duma chairman, claimed that the Central Bank blocked around $500 billion of foreign investors’ funds in response to Western asset freezes. In July, Alexei Timofeev, head of the National Association of Stockholders, asserted that Russia had frozen approximately $312 billion in non-residents’ assets within stocks and bonds.
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