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Russia. President Putin signed a decree temporarily seizing the assets of two foreign energy companies

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President Vladimir Putin signed a decree on Tuesday establishing temporary control over the Russian assets of two foreign energy companies, signaling that Moscow could take similar action against other companies if necessary.

The decree – outlining possible retaliation in the event of a takeover of Russian assets abroad – showed that Moscow had already taken action against the Russian branch of Uniper SE and the assets of Finnish Fortum Oyj.

The decree stated that Russia it must take urgent action in response to unspecified actions by the US and other states that it says are “unfriendly and contrary to international law.”

Vladimir PutinKremlin Press Office/Handout/Anadolu Agency via Getty Images

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Shares in both entities were temporarily taken over by Rosimushchestvoa real estate agency of the federal government.

Secretary of the Treasury in February USA Janet Yellen said Russia should bear the cost of the damage it caused in Ukrainehowever, adding that there are “serious legal obstacles” to the confiscation of major frozen Russian assets.

The owners were not officially deprived of their property

The president of the state-owned bank VTB PAO said on Monday that Russia should consider seizing and managing the assets of foreign companies such as Fortum and returning them only after sanctions are lifted.

Rosimushchestvo told TASS that more foreign companies could expect their assets to be frozen and taken under temporary control by Russia. The Agency would ensure that assets are managed according to their importance to the economy.

“The decree does not concern ownership issues and does not deprive the owners of their property. External management is temporary and means that the original owner no longer has the right to make management decisions,” the Rosimushchestvo agency reported.

The move expected

In October last year, the President of the European Council Charles Michel he said that the EU was considering using Russian assets frozen under sanctions against Moscow to rebuild Ukraine.

The sale of assets by investors from “unfriendly” countries – as Moscow describes those that imposed sanctions on Russia after its invasion of Ukraine – requires the approval of a government commission and in some cases the president.

In February, Uniper priced its majority stake in Unipro’s Russian division at a symbolic €1 to reflect the likelihood that a planned sale to a Russian buyer would fail. Fortum has already warned shareholders that there is a risk of expropriation of its Russian assets.


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