Move seen as sign that Moscow will be allowed to take further action if Russian assets abroad are seized to pay for damage caused to Ukraine by war.
President Vladimir Putin has signed a decree temporarily taking control of the Russian subsidiaries of two foreign energy companies, indicating Moscow could take similar action against other international companies if Russian assets abroad are seized.
The decree – outlining possible retaliatory action if Russian assets abroad are harmed – showed that Moscow had already taken action against Germany’s Uniper division in Russia and the assets of Finland’s Fortum Oyj.
The decree said Russia needed to take urgent action to respond to unspecified actions by the United States and others that the country said were “unfriendly and contrary to international law.”
In October, European Council President Charles Michel said the European Union was considering using seized Russian assets – frozen under sanctions against Moscow over its invasion of Ukraine – to help rebuild Ukraine.
The chief executive of Russia’s state-owned bank VTB PAO said on Monday that Moscow should consider acquiring the assets of foreign companies in Russia, such as Fortum, and not handing them back until sanctions over the war in Ukraine are lifted.
Shares in Uniper and Fortum Oyj have been placed under the temporary control of Rosimushchestvo, the real estate agency of the Russian federal government, the decree said. Rosimushchestvo said more foreign companies could find their assets under temporary Russian control, state news agency TASS reported.
“The decree does not address property issues and does not deprive owners of their assets. Remote management is temporary in nature and means that the original owner no longer has the right to make management decisions,” said TASS.
In February, US Treasury Secretary Janet Yellen said Russia would have to bear the cost of the massive damage caused by the war against Ukraine, but also noted that there were “significant legal obstacles” to seizing large frozen Russian assets. to take.
In November, the UN passed a resolution calling on Russia to be held responsible for its invasion of Ukraine, in violation of international law, and calling on Moscow to pay reparations for the destruction of Ukraine and the lives lost.
The resolution stated that Moscow “must bear the legal consequences of all its internationally wrongful acts, including compensation for injury, including any damages, caused by such acts”.
The temporary seizures of the two companies may not come as a surprise.
Fortum had already warned shareholders that there was a risk that its Russian assets would be expropriated.
Uniper has an 83.73 percent interest in the Russian subsidiary Unipro, which supplied natural gas to Germany for many years. Even before the Russian invasion of Ukraine, Uniper had tried to sell its interest in Unipro. A buyer was found, but Russian authorities never approved the sale.