23 May 2024 19:53

Russia introduces mechanism to compensate for damages from U.S. actions with U.S. property

MOSCOW. May 23 (Interfax) - Russian President Vladimir Putin has signed the Order on the Special Procedure Compensating the Damage done to the Russian Federation and the Russian Central Bank by the Unfriendly Actions of the United States.

Order No. 442 dated May 23 has been published on the official website of legal information.

The order permits the compensation of damage through court by using the assets of the United States and/or U.S. citizens in Russia, including securities, shares in capital of Russian legal entities, and property rights.

The Russian government is to take measures to establish a special procedure compensating for the damage caused to Russia or the Bank of Russia "in relation to decisions by the U.S. central government and/or judicial authorities, applied in the event of an unjustified deprivation of Russian holders of the rights to property," the order said.

A Russian rights-holder may file a claim in accordance with the jurisdiction rules established by Russian procedural laws, asking to establish whether there was an instance of them being stripped of their rights to property. The claim also must contain an estimate of the damage.

If the court accepts the claim, and provided there is "information allowing [it] to make a justified presumption of the absence of sufficient grounds for depriving a Russian rights-holder of their rights to property," the court will ask the government commission for oversight of foreign investment to provide a list of assets of the United States and U.S.-linked individuals, which could be used to compensate the damage.

The commission will in turn "organize the detection of any property which, in accordance with the principle of proportionality, could be used for compensation purposes, and submit the list. This may include any moveable and immoveable property of the United States and U.S. individuals, any securities or interest they own in the authorized capital of Russian legal entities, and property rights of the U.S. and U.S. individuals.

Upon considering the claim, the court will rule on whether there was an instance of the unjustified deprivation of a Russian rights-holder of their property rights and award damages, or it will dismiss the claim.

In the former case, the ruling will stipulate a "termination of the rights to property of the U.S. or a U.S. individual included in the list" and the subsequent transfer of such rights to the Russian rights-holder for compensation purposes.

The government is given the power to determine a federal executive body authorized to apply to a court, except in cases where the injured party is the Bank of Russia.

The government has four months to enact the legal changes.