Russia to expand seizure of foreign assets, Reuters reports

The Russian government is planning to expand its authority to seize the frozen assets of companies and investors from countries that have sanctioned Moscow over its war against Ukraine, Reuters reported on Feb. 7, citing sources familiar with the matter.

A draft law approved this week by the Russian government’s legislative commission lays out the procedure for seizing foreign property in retaliation for freezing Russian assets abroad.

The legislation follows a decree signed by Russian President Vladimir Putin in May 2024, which allows the government to identify U.S. property and securities as compensation for losses caused by Western asset freezes.

The process would involve lawsuits filed by the Russian authorities, including the central bank and the Prosecutor General’s Office.

A source told Reuters that C-type accounts — holding funds belonging to foreign investors but blocked unless authorized by Moscow — could be at risk. This could impact individuals and large U.S. investment funds with billions of dollars trapped in Russia.

The move comes as the U.S. and European allies seek to use frozen Russian assets to finance aid for Ukraine. The U.S. government is considering using proceeds from these assets to purchase American weapons for Kyiv, Trump administration envoy Keith Kellogg told Fox News on Jan. 24.

Western countries have frozen $300 billion in Russian assets, though they can only access an estimated $3.2 billion in annual profits.

These earnings will help finance a $50 billion G7 loan to Ukraine, with the European Union contributing €20 billion ($20.6 billion) to the initiative and the U.S. adding $20 billion.