Putin takes over Russian assets of two foreign energy firms

Russian President Vladimir Putin speaks at a Security Council meeting in the Kremlin in Moscow, Russia, Friday, March 28, 2014. (AP Photo/RIA-Novosti, Alexei Nikolsky, Presidential Press Service)

London — President Vladimir Putin on Tuesday signed a decree establishing temporary control of the Russian assets of two foreign energy firms, signaling Moscow could take similar action against other companies if need be.

The decree – outlining possible retaliation if Russian assets abroad are seized – showed Moscow had already taken action against Uniper SE’s (UN01.DE) Russian division and the assets of Finland’s Fortum Oyj (FORTUM.HE).

The decree said Russia needed to take urgent measures to respond to unspecified actions from the United States and others it said were “unfriendly and contrary to international law”.

The shares in the two entities have been placed in the temporary control of Rosimushchestvo, the federal government property agency, the decree said.

In February, U.S. Treasury Secretary Janet Yellen said Russia should bear the costs of damage caused by its war on Ukraine, adding though there were “significant legal obstacles” to confiscating major frozen Russian assets.

The CEO of state-owned bank Bank VTB PAO (VTBR.MM) had on Monday said Russia should consider taking over and managing the assets of foreign companies such as Fortum, only returning them when sanctions are lifted.

Rosimushchestvo said more foreign firms could find their assets under temporary Russian control, TASS reported. The agency would ensure the assets were run in accordance with their importance for the economy.

“The decree does not concern ownership issues and does not deprive owners of their assets. External management is temporary in nature and means the original owner no longer has the right to make management decisions,” TASS cited the agency as saying.

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Last October European Council President Charles Michel said the EU was looking at using Russian assets frozen under sanctions against Moscow towards rebuilding Ukraine.

Asset sales by investors from “unfriendly” countries – as Moscow terms those that imposed sanctions against Russia following its invasion of Ukraine – require approval from a government commission and, in some cases, the president.

In February, Uniper valued its majority stake in Russian division Unipro at a symbolic 1 euro to reflect the likely chance a planned sale to a Russian buyer would fall through. Fortum had already warned shareholders there was a risk its Russian assets could be expropriated.

*David Ljunggren; Editing: Leslie Adler – Reuters

This article was originally posted at sweetcrudereports.com

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