Sunday, April 14, 2024

Putin signs decree to control two foreign firms’ assets in Russia

(Al Jazeera Media Network) President Vladimir Putin has signed a decree that takes temporary control of the Russian subsidiaries of two foreign energy firms, signalling that Moscow could take similar action against other international companies if Russian assets abroad are seized.

The decree — outlining possible retaliation if Russian assets abroad are harmed — showed 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 measures to respond to unspecified actions from the United States and others it said were “unfriendly and contrary to international law.”

In October, European Council President Charles Michel said the European Union was looking at using seized Russian assets — frozen under sanctions against Moscow for 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 taking over the assets of foreign companies in Russia, such as Fortum, and only return them when sanctions over the war in Ukraine are lifted.

Shares in Uniper and Fortum Oyj have been placed in the temporary control of Rosimushchestvo, the Russian federal government’s property agency, the decree said. Rosimushchestvo said more foreign firms could find their assets under temporary Russian control, state news agency TASS reported.

“The decree does not concern ownership issues and does not deprive owners of their assets. External management is temporary in nature and means the original owner no longer has the right to make management decisions,” TASS cited the agency as saying.

In February, U.S. Treasury Secretary Janet Yellen said Russia should bear the costs of the huge damage caused by its war on Ukraine, though also noting that there were “significant legal obstacles” to confiscating major frozen Russian assets.

In November, the UN adopted a resolution calling on Russia to be held accountable for invading Ukraine, which was contrary to international law, and for Moscow to pay reparation for its destruction of Ukraine and the lives lost.

The resolution stated that Moscow “must bear the legal consequences of all its internationally wrongful acts, including making reparation for injury, including any damage, caused by such acts.”

The temporary seizures of the two firms may come as no surprise.

Fortum had already warned shareholders there was a risk its Russian assets could be expropriated.

Uniper has an 83.73 percent stake in the Russian subsidiary Unipro, which for years had supplied natural gas deliveries to Germany. Even before Russia’s invasion of Ukraine, Uniper had sought to sell its stake in Unipro. A buyer was found, but the Russian authorities never approved the sale.

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