Exchanging frozen assets theoretically possible, though not simple, idea still not close to implementation - Siluanov
MOSCOW. Nov 25 (Interfax) - Exchanging assets frozen in the European Union and Russia, because of various restrictions, is theoretically possible, though the procedure is complex and requires legislative decisions, among other matters, Russian Finance Minister Anton Siluanov said.
"The topic is under consideration, though it is more complicated. It is necessary here firstly to verify the volume of frozen assets; this needs to be confirmed," Siluanov said during an interview on the Rossiya 24 TV channel.
"In principle, this is theoretically possible, on the one hand. On the other hand, here we need to take a number of legislative decisions that would allow us to use the frozen funds of foreign investors, which are already frozen here in the Russian Federation, for settlements on those assets that are frozen abroad. The situation is not simple. There are also such initiatives, and they are under consideration, and I would say that they are at the initial stage of consideration," the minister said.
Euroclear and Clearstream as of the beginning of March ceased operations of inter-depository bridges with the National Settlement Depository (NSD), and the provision has been legally enshrined since the beginning of June at the level of the European Union, which had imposed sanctions against the NSD. The European Commission in October published clarifications that gave the market some hope regarding the fate of the frozen assets. According to the document, the authorities of individual EU member states could authorize transactions required for closing contracts and agreements, which had been concluded before sanctions were imposed against the NSD on June 3, by January 7, 2023. The NSD, in turn, said that following agreement with Euroclear and external European consultants, it had sent requests for general licenses to the respective Belgian and Luxembourg ministries of finance in order to unblock the assets of all non-sanctioned investors, and it had expected to receive a general permit in October.
Russia implemented its own restrictions nearly simultaneously with the suspension of inter-depository bridges with the EU. As per the presidential decree dated March 5, special "C" type ruble accounts were introduced. Among other matters, income from securities owned by "unfriendly" non-residents is blocked on these accounts, and the Russian authorities must grant permission to convert the income into currency. According to the Central Bank of Russia (CBR), funds in these accounts exceeded 280 billion rubles as at the beginning of November.
Deputy Finance Minister Alexei Moiseyev said that blocking funds on special accounts was not confiscation, but, rather, formed a "negotiating position" amid mutual restrictions.
"In terms of the frozen funds, different approaches are currently under development, and there are a number of approaches. Actually, 'C' type accounts were created in order to have an argument in disputes with Western infrastructure, and, well, some kind of financial resource, bluntly saying, for an exchange. Elaboration is currently underway," Moiseyev said earlier this November.