The Russian President authorized the use of U.S. property to compensate for damage caused by the seizure of Russian assets

On May 23, 2024, the Russian President signed the Decree "On the Special Procedure for Compensation of Damage Caused to the Russian Federation and the Russian Central Bank in Connection with Unfriendly Actions of the United States of America", which regulates the procedure for compensation of damage in case of unjustified deprivation of property rights of Russian right holders.

As follows from the decree, a Russian holder of rights to property in case of confiscation of this property in the United States is entitled to apply to the court with an application to establish the fact of unjustified deprivation of its rights to property in the United States, having assessed its damage. If the application is accepted, the court sends a request to the Government Commission on Foreign Investment Control to submit a list of property that can be used to compensate for the damage. Such property includes:
  • U.S. property in Russia;
  • property of foreign persons associated with the United States, as well as
  • property of persons that are controlled by the said foreign persons, regardless of where they are registered.

Commission identifies property owned by the U.S. or U.S. persons that, subject to the principle of proportionality, may be used for compensation purposes, which include, inter alia:
  • movable and immovable property of the U.S. or U.S. persons located in Russia;
  • securities, shares in the authorized (share) capitals of Russian legal entities;
  • property rights.

If a court decides to establish the fact of unjustified deprivation of the Russian right holder's rights to property and to compensate for the damage, the rights to property of the United States of America or US persons are terminated and transferred to the Russian right holder in order to compensate for the damage.