RUSSIAN LEGISLATION PROPOSES FOREIGN ASSET SEIZURES TO COMPENSATE SANCTIONED RUSSIAN NATIONALS

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.

This entry was posted in Russia, Ukraine by Michael O'Kane. Bookmark the permalink.

About Michael O'Kane

Michael O’Kane is a partner and Head of the Business Crime team at leading UK firm Peters & Peters. Described as ‘first-rate’ (Legal 500 2012), he “draws glowing praise from commentators” (Chambers 2013) for handling the international aspects of business crime, including sanctions, extradition and mutual legal assistance. Called to the Bar in 1992 and prior to joining Peters & Peters he was a senior specialist prosecutor at the Crown Prosecution Service Headquarters(CPS). At CPS HQ he was a key member of a small specialist unit responsible for the prosecution of serious and high profile fraud, terrorist and special interest criminal matters including the Stansted Airport Afghan hijacking and the prosecution of Paul Burrell (Princess Diana’s butler). Michael joined Peters & Peters in 2002. He became a partner in May 2004, and Head of the Business Crime team in May 2009. Since joining Peters & Peters, Michael has dealt with a wide range of business crime matters. He has particular expertise in international sanctions, criminal cartels, extradition, corruption, mutual legal assistance, and FSA investigations. Described as“ an influential practitioner in fraud and regulatory work, so much so that he is top of the referral lists of many City firms for independent advice for directors” (The Lawyer’s Hot 100 2009), he was recognised as one of the UK’s most innovative lawyers in the 2011 FT Innovative Lawyer Awards and included in the list of the UK's leading lawyers in 'The International Who's Who of Asset Recovery 2012. In 2012 he was the winner of the Global Competition Review Article of the Year. Michael regularly appears on television and radio to discuss his specialist areas and he is the author of the leading textbook on the UK Criminal Cartel Offence “The Law of Criminal Cartels-Practice and Procedure” (Oxford University Press 2009). Recent/Current Sanctions Work • Representing 109 individuals and 12 companies subject to designation by the European Council under targeted measures imposed against Zimbabwe. This is the largest and most complex collective challenge to a sanctions listing ever brought before the European Court. • Acting for a former Egyptian Minister and his UK resident wife, challenging their designation by the European Council of Ministers under targeted measures brought against former members of the Egyptian Government. • Advising a company accused in a UN investigation report to have breached UN sanctions imposed in relation to Somalia. • Advising a UK company in relation to ongoing commercial relationships with an Iranian company listed under both EU and UN sanctions. • Advising an individual in relation to a UK investigation for alleging breaching nuclear export controls.

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