Idea of paying foreigners with bonds linked to frozen assets is on hold, hard to implement - dep Russian finance minister

ST. PETERSBURG. May 11 (Interfax) - The idea of paying non-residents exiting Russia with special bonds tied to frozen Russian assets is not on the agenda now: no means of implementing it has been found, Deputy Finance Minister Alexei Moiseyev told reporters.

"There's no discussion of this topic, it isn't being discussed for now. We've talked and talked, but haven't figured out how to do it," he said.

Paying foreigners who are leaving the Russian market with special bonds linked to Russia's frozen international reserves was proposed by LDPR member Vladimir Koshelev in April. The Central Bank of Russia said it was willing to consider this, but also noted a number of nuances. "We managed to very quickly take a look at how to treat this initiative. It needs to be explored further, but in principle such an initiative can be considered as one of the measures to protect Russian assets frozen abroad," Central Bank chief Elvira Nabiullina said in the State Duma.

But several things need to be considered, she said. Firstly, linking bonds to frozen assets could lead to the disclosure of information about the structure of international reserves, which the CBR would not want to happen. Secondly, Russia is unlikely to be able to foist these bonds on nonresidents, much less force foreign regulators to unfreeze assets, even if the holders of the bonds are their citizens, Nabiullina said. Furthermore, there is the issue of the CBR's immunity in regard to its assets. "Despite the freeze, so far the legal immunity of the CBR's assets is not disputed. The question, of course, is what the Central Bank will get in return," Nabiullina said.

Moiseyev himself has said the idea of paying nonresidents who are leaving the country with special bonds linked to frozen Russian assets was under consideration, but that it would be difficult to implement in practice. "It's fairly complicated in terms of practical implementation, so we're taking a look," he said at the end of April.