On September 14, the Valdai Club hosted an expert discussion, titled “Confiscation of Russian Assets: Limits of Aggravation”, dedicated to the fate of the property of Russians abroad.
Discussion moderator Ivan Timofeev
noted that the confiscation of frozen Russian assets is now being actively discussed in the West. There is no mass practice of this kind yet, but appropriate legal mechanisms are gradually being created and these trends are also noticeable at the political level.
Director of the Department for Control of External Restrictions of the Ministry of Finance of the Russian Federation, noted that the West did not dare to attempt to sharply isolate Russia, as had been expected after the start of the special military operation. Russia is too important for the world markets. A scenario where Russia would gradually be isolated is also unlikely: the problem of negative effects on the Western countries’ own economies remains and cannot be overcome by any political statements.
Dean of the Faculty of World Economy and International Politics at the National Research University Higher School of Economics, emphasised that there are still few real cases of confiscation and they are de facto marginal. “Apparently, a solution how to confiscate without breaking the entire structure of private property as an institution has not been found,” she said. In her opinion, the system will most likely continue to operate in the same spirit, mainly focusing on physical rather than financial assets. “There will be more and more discussions about small examples of the humiliating seizure of private assets at the borders, which will cause media discussion, increase the information flow and create the impression that sanctions are working, but not leading to some irreversible decisions which will be extremely difficult to backtrack,” Likhacheva noted. She emphasised that it is not only about institutions and the importance of Russia, but also about the fact that it is obvious to everyone: if confiscations affect Russia, China will be next. And in China’s case the scale of investment is much larger, and the retaliatory actions would be much more difficult to calculate.
“Russia’s role in the global energy sector is too significant to throw it away with sanctions regimes and confiscations,” said Konstantin Simonov,
Director General of the National Energy Security Fund, professor at the Financial University under the Government of the Russian Federation. He noted that sanctions undermine the institution of private property and, accordingly, trust of the Global South in Western institutions and rules. Business, especially businesses with long investment cycles, cannot work like that, so it is probably waiting until they “start to push off from the bottom,” but politicians force them to “punch through the bottom” every time, the analyst admitted, noting that the “creativity” of regulators is likely to grow. Describing the Russian response, Simonov emphasised that Russia is not forcing owners to get rid of assets. Leaving Russia is a voluntary decision of Western owners. In the West, no one asks Russian owners about this.
lawyer, partner of BGP Litigation commented on the situation around the European Commission’s clarifications regarding the import of personal belongings and vehicles into the EU by Russian citizens. According to him, what is happening shows the level of incompetence among EU authorities, who are entangled in their own anti-Russian policies and rhetoric. EU sanctions legislation (especially the eighth package of sanctions) is aimed at income from business activities, and attempts to apply it to confiscate property of individuals not intended for sale clearly contradict its spirit. The lawyer also outlined the state of affairs with assets confiscations. He pointed out that now there are only two jurisdictions that carry them out — Ukraine and Canada. In the European Union, Switzerland, Britain, the USA and other jurisdictions he examined, introducing such measures is apparently both legally difficult and dangerous for credit ratings.