On 8 October 2014, Russia took the first step towards enacting a law that would allow foreign-owned assets in Russia to be seized and used to compensate individuals and companies targeted by western sanctions.
The bill has passed its first reading in the Russian Parliament. It states that Russian nationals whose “rights are infringed” by foreign states may apply for compensation from the Russian state budget for assets they have had seized or other losses they have incurred. Russian courts would then have the power to order the confiscation of assets in Russia owned by the country in question to recoup the cost of providing compensation.
The Duma (the lower house of the Russian Parliament) passed the bill on 8 October 2014 by a vote of only 233 to 202.
The bill must pass through two more readings in the Duma and Russia’s upper parliament and be signed by Russian President Vladimir Putin before becoming law. Western companies currently have billions of dollars of assets based in Russia, and the type of assets that can be seized for compensation under the proposed legislation includes diplomatic real estate.