Welsberg
Forumer attivo
On Thursday (19th January 2023), the European Parliament adopted a resolution to establish special tribunal to punish Russian crimes. The resolution also calls on the member states to discuss the legal possibility of using Russian state assets as reparations, and to consider depriving Russian assets of sovereign immunity:
- Invites the EU and the Member States, as well as their partners and allies, to engage in discussion on the legal possibility of using sovereign assets of the Russian state as reparations for the violations of international law by Russia in Ukraine, including potentially by denying such assets the protections of sovereign immunity or limiting such protections owing to the gross nature of these violations.
- Supports the UN General Assembly recommendation as the first step towards the establishment by UN member states, in cooperation with Ukraine, of an international register of damage to serve as a record for future reparations for damage, loss or injury to all natural and legal persons concerned, and the long-term, widespread and severe damage to the natural environment and the climate, as well as to the state of Ukraine, caused by the internationally wrongful acts of the Russian Federation and its allies in or against Ukraine, as well as to promote and coordinate evidence gathering.
EU Parliament resolution comes just 2 months after United Nations adopted a draft resolution on reparations of Russian assets to Ukraine back in November 2022.
To date, it has been reported that the West froze around USD 330bn of Russia's international reserves since beginning of the conflict in February. In response to UN resolution in November, Dmitriy Medvedev, Deputy Chairman of the Security Council of Russia stated that as a response Russia will have to withdraw the money and property of private investors from countries that, based on the decision of the UN General Assembly, will adopt national acts "on the theft of Russian assets." Russia previously announced that blocked assets of western investors in Russia amount to just more than USD 300bn as well, as Medvedev phrased at the time "Enough to make up for what was stolen from Russia".
It is important to note that assets of all investors from so-called “unfriendly” jurisdictions have been frozen in Russia in S-type accounts. No transactions are permitted to be concluded with these S-type accounts without special permission from Russian government. Furthermore, under cancellation process for depositary receipts of Russian companies, local shares are also delivered to S-type account if the investor is based in unfriendly jurisdiction.
On 29th December Central Bank of Russia released directive stating that banks/credit institutions are required to close existing S-type accounts operated at National Securities Depository and transfer cash balances to S-type accounts opened at DIA (Depositary Insurance Agency). The deadline for the transfers is today, 20th January 2023.
Although no further official updates have been announced by Russian Central Bank since September regarding mechanism to compensate local Russian investors using income from S-type accounts, the governor of Central Bank had originally voiced that such solution will be implemented via DIA (Deposit Insurance Agency).
If you still hold DRs or local shares of Russian companies, and would like to discuss alternatives currently available to you, please contact our desk.
Links to EU Parliament announcement and joint motion:
https://www.europarl.europa.eu/news/en/press-room/20230113IPR66653/ukraine-war-meps-push-for-special-tribunal-to-punish-russian-crimes
https://www.europarl.europa.eu/doceo/document/RC-9-2023-0063_EN.html
