Russia implements a new mechanism to seize U.S. assets for compensation

​​​​​​​​​​The Presidential Decree issued by the President of the Russian Federation on 23 May 2024, titled "Special procedure for compensation of damage caused to the Russian Federation and the Central Bank of the Russian Federation in connection with the unfriendly actions of the United States of America," introduces a significant new policy.

By issuing this Decree, the President of Russia authorized the use of US property in Russia to compensate for the seizure of Russian assets. The Decree allows victims to go to court if their property rights were unjustifiably deprived by a decision of the US authorities.

If a Russian court determines that the US authorities lacked sufficient grounds to seize Russian assets, it will request the Russian Foreign Investment Control Commission (hereinafter referred to as the Commission) to provide a list of US property that can be used as compensation for damages. This property may belong to US citizens and residents, as well as legal entities owned by US citizens, regardless of their place of registration. The Decree categorizes all of these as US persons.

Russian courts are empowered to use US property in Russia to compensate for damages resulting from the seizure of Russian assets in the US. The US property that could be used as compensation includes:

The Decree establishes a new mechanism in Russia that allows a Russian court, with the assistance of the Commission, to identify the assets of US persons in Russia and use them for compensation at a proportionate value to the lost Russian assets due to US government or court decisions.

It should be emphasized that the entities entitled to compensation under this Decree are solely the Central Bank of Russia and the Russian Federation itself (i.e., the state).​​​​