Russia Considers Rapid Asset Sales as Retaliation for Potential EU Seizure

Russia Prepares for Rapid Sale of Foreign Assets

According to a source close to the Russian government, Russia is contemplating a drastic option: nationalizing and rapidly selling foreign assets located within its borders. This potential move comes as a response to any future actions by the European Union to seize frozen Russian assets held abroad.

In a preemptive move, Russian President Vladimir Putin has signed an order allowing for the “fast-track” sale of state-owned assets under special procedures. The decree aims to accelerate the sale of numerous companies, including both Russian and foreign-owned entities. The source familiar with the matter indicated that Russia may take reciprocal measures if the EU begins seizing Russian assets.

Large Western Companies Potentially at Risk

Hundreds of Western companies remain operational in Russia across various sectors, from banking to consumer goods, including prominent names like UniCredit, Raiffeisen Bank International AG, PepsiCo, and Mondelez International. These companies' presence makes them vulnerable to potential nationalization should tensions escalate.

Background to Tensions: EU Plans Regarding Russian Assets

The potential Russian action comes as EU leaders are meeting in Denmark to discuss a plan that aims to provide loans to Ukraine totaling 140 billion euros ($164 billion USD) from frozen assets of the Russian central bank. Negotiations aim to finalize the plan ahead of a formal summit later in the month.

Proposals to leverage the seized Russian assets have gained traction within the EU after the United States, under former President Donald Trump, halted direct support for Ukraine. However, reports indicate that the EU plan does not equate to direct asset confiscation, as Moscow could recover the funds if it later agrees to compensate for damages caused by the Ukrainian conflict.

New Russian Decree Speeds Up Sale Process

According to documents published on the Russian government website, the new Russian decree caps pre-sale valuations at 10 days and expedites ownership registration. State-owned Promsvyazbank PJSC has been designated to handle such transactions. Putin’s order emphasizes that these changes are a response to sanctions imposed on Russia.

Reactions and Warnings

Kremlin spokesman Dmitry Peskov did not immediately respond to requests for comment. He had earlier described the EU’s asset plans as an “illegal seizure of Russian property, which is tantamount to theft.”

Putin has warned that the global financial order would be undermined if the West takes action to seize Russia’s frozen national reserves held abroad. So far, Russia has refrained from nationalizing assets owned by international companies. Instead, it has pursued a strategy of placing some companies under temporary management before selling them at steep discounts to preferred buyers.

Disclaimer: This analysis provides an overview of the current situation and does not constitute investment advice. Investors should consult a qualified financial advisor before making any investment decisions.