EU authorities say there are no talks on an asset swap with Russia

The EU authorities are not negotiating with Russia on the exchange of frozen assets, RBC was confirmed in the European Commission. As the FT wrote earlier, they are unlikely to be possible in the near future.

The European Commission is not aware of the proposal to exchange frozen assets with Russia, an EC representative said in response to a request from RBC.

“We are not aware of such an offer, and there are no negotiations with Russia on a potential asset swap either,” she said.

The fact that the European Union is not negotiating with Russia on the exchange of frozen assets was previously reported by the Financial Times, citing four high-ranking EU officials. One of them noted that detailed negotiations on this issue are unlikely to be possible in the near future.

Since 2022, due to sanctions, Russian investors have been blocked from accessing foreign securities they own, as well as cash payments on them (we are talking about dividends, coupons, redemptions), which are accounted for in accounts in European depositories - Euroclear and Clearstream.

The EU authorities emphasized that the Russians can still regain access to their foreign assets if they receive the appropriate licenses from the Belgian finance ministries (Euroclear is registered here) and Luxembourg (Clearstream is registered here). Foreign investors, in turn, cannot make transactions with Russian securities they own. At the end of February 2022, the Bank of Russia banned Russian brokers from executing their orders to sell Russian securities.

The exchange scheme was proposed this week by the Russian Ministry of Finance and the Central Bank. It assumes that foreigners will buy blocked foreign papers from Russians with money from C accounts. Such an opportunity will be given to them by a presidential decree and other legal acts that are being developed by the Ministry of Finance with the Bank of Russia.

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“It is assumed that at the initial stage, conditions will be created for unlocking assets primarily for retail investors: interested foreign investors will be given the opportunity to purchase from Russian investors the corresponding “blocked” foreign securities at the expense of funds held on type “C” accounts. The participation of investors (both Russian and foreign) in this process will be voluntary,” the Central Bank explained.

Finance Minister Anton Siluanov said that the assets of 3.5 million Russian investors in the amount of 1.5 trillion rubles are now blocked. The Central Bank previously estimated the total amount of blocked assets (that is, taking into account the assets of organizations) at 5.7 trillion rubles. The head of the National Association of Stock Market Participants (NAUFOR), Alexey Timofeev, noted that at the first stage, unlocking could affect retail investors with portfolios up to 100 thousand rubles. But without permission from regulators in the EU, non-residents may not want to participate in it, stressed lawyers interviewed by RBC.