The Ministry of Finance discusses options for the exchange of blocked assets of Western and Russian investors


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What Siluanov said Assets of Russian investors frozen by Western countries can be exchanged for foreign assets located in Russia. Finance Minister Anton Siluanov stated this in an interview with Naila Askerzade on the Russia-24 TV channel. “In principle, this is theoretically possible, on the one hand. On the other hand, here we need to take a number of legislative decisions that would allow us to use the frozen funds of already foreign investors that are frozen here in the Russian Federation for settlements on those assets that frozen abroad,” the Finance Minister said. The Minister noted that such an exchange is now at the initial stage of consideration. According to Siluanov, the scheme itself is quite complicated, since the volume of frozen assets must be verified and appropriate confirmations must be obtained in order to ensure that the interests of Russian and foreign investors are respected. In addition, the head of the Ministry of Finance said that Moscow is ready to exchange Eurobonds, transactions with which have become more complicated after the imposition of sanctions, for Russian bonds. However, this is also associated with difficulties. “We are ready to move in this direction, but act on the basis of the prices that are formed for these assets. That is, we determine the cost of Eurobonds on the market, we are ready to issue ruble bonds and, accordingly, make such exchanges. But not everyone is happy with this today. Therefore, we are in dialogue while the final decision is still under consideration,” Siluanov added. How many Russian assets are frozen abroad In the spring, the Ministry of Finance estimated the amount 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, IOUs, currency, the reserve position of the IMF. Legally, these funds still belong to the Russian Federation, but they cannot be disposed of due to sanctions. Over the past months, reports have become more frequent in Europe and the United States that these funds should be confiscated and directed to the restoration of Ukraine. However, there are no precedents and legal grounds for such actions yet. The Western countries themselves also cannot accurately name the amount of seized assets. In May, the EU authorities reported that they had frozen the assets of the Russian Central Bank for €23 billion. According to the November data of Politico, citing an internal EU document, the EU countries froze Russian assets for a total of €68 billion. It is not specified which funds are in question : the gold and foreign exchange reserves of the Central Bank or the property and accounts of Russian officials and businessmen who fell under sanctions. The publication wrote that €50 billion was frozen in Belgium, another €5.5 billion in Luxembourg. Together with Italy, Germany, Ireland, Austria and France, these countries account for 90% of all Russian assets frozen by the European Union. In October, Member of the European Commission for Justice Didier Reynders stated that Brussels had frozen the assets of Russian business for €17.4 billion. A similar assessment was given by the representative of the EC, Christian Wiegand. He clarified that we are talking about assets – accounts, real estate, yachts and other luxury goods – 1,350 individuals and organizations that fell under European sanctions. In May, the amount of seized funds was estimated at about €10 billion. The same Reinders, in an interview with TASS at the end of September, noted that if you add up the assets of Russian entrepreneurs who were arrested in the EU and the G7 countries (that is, back in the USA, Great Britain and Japan), then about €30 billion will come out. According to a member of the European Commission, some EU countries implement the announced sanctions in an extremely limited way: for example, Hungary froze the assets of Russians for only €3,000. Washington has already reported more impressive amounts, which are commensurate with the estimates of the Russian Ministry of Finance. At the end of June, the US authorities announced that they had frozen Russian assets worth $330 billion. Of these funds, $300 billion accounted for the country’s gold and foreign exchange reserves, and another $30 billion for the assets of sanctioned citizens and companies. How many foreign assets are there in Russia Almost immediately after the freezing of Russian assets abroad, in March, Deputy Chairman of the Security Council Dmitry Medvedev warned that Moscow could go for a symmetrical response. “Our answer is to nationalize the assets of foreign companies and individuals with unfriendly jurisdiction,” Medvedev said. In November, when the UN General Assembly adopted a resolution on the need to create a mechanism for reparations to Ukraine, Medvedev repeated that Moscow would then begin to seize the property of foreign companies. According to various estimates, trillions of dollars worth of property, accounts and other assets of companies from unfriendly countries are located in Russia. According to the Central Bank, as of October 1, 2021, the total volume of foreign investment in the Russian economy amounted to $1.18 trillion. More than half of these funds – $ 679 billion – are shares in the business. Another $392 billion is all kinds of debt: bonds, loans, trade advances. The rest is cash, deposits, IMF special drawing rights, and other investments. Since the authorities, in response to the sanctions, introduced protective measures to prevent the withdrawal of capital abroad, these funds are actually locked up inside the country. In May, State Duma Speaker Vyacheslav Volodin said that the Central Bank, in response to the freezing of Russian assets in the West, blocked foreign investors’ funds in Russia in the amount of about $500 billion. In July, Alexei Timofeev, president of the National Association of Stock Market Participants (NAUFOR), said that assets of non-residents in stocks and bonds totaling $312 billion.

A photo: Newspaper.RuNewspaper.Ru

Source: Rambler


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