Exchange of assets: New opportunities for “unfriendly” owners of type “C” accounts
Russian legislation now provides new options for the “exchange” of de facto frozen assets. If a Russian resident has assets (property, securities, etc.) maintained abroad, the disposal of which is restricted due to “unfriendly” actions of foreign states (a very broad definition), and the “unfriendly” person holds securities in Russia, these can be “exchanged”.
In practice, this means both parties can sell their respective assets to each other. However, such a transaction requires approval from a special Russian governmental commission. Obtaining this approval is possible but not guaranteed and may take more than nine months. It is important that funds from a type “C” bank account can be used for this type of transaction.
Another change is that “unfriendly” persons who received dividends on their shares at type “C” accounts may also transfer them to a Russian resident under a specific transaction with him, though this also requires approval from the same governmental commission.
While these “exchange” procedures do not appear straightforward for ordinary type “C” account holders due to the need for governmental approval, it could represent the first step toward a broader mechanism for asset exchanges between foreign and Russian persons. We will keep monitoring this issue.
The information provided in this message is for general guidance only and does not constitute legal or financial advice. MAGENTA Legal accepts no liability for any actions (or inactions) based on the information provided. Please consult with your legal and/or financial advisor.
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