Russia drafts law on confiscating “Unfriendly” assets

The Russian Ministry of Justice has prepared a draft law to formalize procedures for compensating damages caused to Russia or the Central Bank of Russia by the actions committed by authorities of “unfriendly” states. The proposal, coordinated with relevant ministries, is pending review by the Government Commission on Legislative Activities.

Background

On 23 May 2024, Russian President issued Decree No. 442, authorizing the use of U.S.-owned assets in Russia – whether held by the U.S. government, American citizens, or companies – to compensate for the seizure of Russian sovereign and private assets abroad by U.S. authorities. Implementation details are to be determined by the Russian Government.

The draft law seeks to extend this approach to other “unfriendly” states, including the EU member states, Canada, Switzerland, South Korea, Japan, and others. It allows for the confiscation of sovereign assets as well as private property owned by individuals and entities from these states. Officials have framed the measure as a direct response to the potential expropriation of Russian assets overseas.

While Decree No. 442 provides a precedent, it has yet to be implemented. If enacted, the draft law would mark the first legislation explicitly providing for the confiscation of assets belonging to any of the “unfriendly” states or their affiliates in response to the seizure or freezing of Russian assets.

Proposed Confiscation Process

The draft law outlines a process similar to that established under Decree No. 442. Claims for damages would be filed with the Commercial (Arbitrazh) Court of the Moscow Region. Eligible claimants include the Russian Federation, the Central Bank of Russia, federal executive authorities, or the Prosecutor General’s Office. Defendants may include foreign states responsible for freezing Russian assets, with private individuals or companies potentially named as co-defendants if their property is targeted. The Government Commission for the Control of Foreign Investments is going to compile the list of assets subject to confiscation.

Current Status

As of 22 January 2025, the draft law’s text has not been published, and it has yet to be submitted to the State Duma or formally introduced into the legislative process. Nordic Star Law Offices team continues to monitor developments closely and is prepared to assist with navigating the evolving regulatory landscape, including issues related to foreign companies’ operations in Russia and strategies for exiting the market.

 
Artem Zhavoronkov
Partner, Attorney-at-Law

+7 921 905 47 66
St. Petersburg

 
Anna Zabrotskaya
Managing Partner in Russia, Attorney-at-Law

+7 921 951 39 18
St. Petersburg

 
German Azarov
Associate

+7 921 961 46 90
St. Petersburg