President Vladimir V. Putin of Russia has signed a decree that could accelerate the seizure and sale of Western assets in Russia. The move was a shot across the bow to European leaders who are convening Wednesday to discuss a proposal to lend $165 billion to Ukraine using Russian state assets frozen in Europe.
Mr. Putin signed the decree on Tuesday, the latest sign that Moscow is planning to retaliate if European leaders issue the loan to Ukraine. Analysts believe Russia could respond by seizing the assets of foreign companies and individuals from the nations backing the loan. Russia has already seized the operations of multiple Western companies during the war.
Anton Siluanov, the Russian finance minister, has claimed that Russia has frozen an amount of Western assets equal to the Russian assets frozen by the West and would respond symmetrically. Since the start of the war, Moscow has been distributing the profits from Western assets in the country into special bank accounts frozen by the Russian state.
European officials have begun to eye Russian frozen money more intensely as American aid for Ukraine dries up under President Trump. The European Union’s executive arm is advancing a proposal to issue an interest-free “reparations loan” of 140 billion euros ($165 billion) to Ukraine, financially engineered to make use of the Russian assets without seizing them outright. The loan would be repaid only if Russia compensates Ukraine for the damage caused during the war. Britain is considering a similar plan.
“We need a more structural solution for military support,” the European Commission’s president, Ursula von der Leyen, said on Tuesday. “This is why I have put forward the idea of a reparations loan that is based on the immobilized Russian assets.”
She said the loan would be dispersed in tranches and would not involve any direct seizure of Russian assets. The Group of 7 nations already provided a loan to Ukraine using interest from the Russian assets as collateral.
The idea to further exploit the assets has gained traction after an initial proposal by Ms. von der Leyen and a similar one last week by the German chancellor, Friedrich Merz. He faces a rising far-right opposition at home that has attacked him for spending German taxpayer money on Ukraine. But the prime minister of Belgium, where most of the Russian assets are held, has opposed the idea, citing outsize risk for the small European country.
“It’s a very interesting geopolitical turn,” said Maria Shagina, a research fellow at the International Institute for Strategic Studies. Given Mr. Trump’s isolationist foreign policy, she added, “Europe needs to play ball and adopt another strategy.”
What has Russia said?
The change in Europe is an unwelcome development for Russia, where President Vladimir V. Putin has invested heavily over many years in the nation’s financial stability.
The roughly $300 billion worth of Russian sovereign assets frozen in the West, mostly located in the European Union and Britain, make up nearly half of the Russian Central Bank’s gold and foreign exchange reserves, the country’s Finance Ministry said in 2022. Western nations froze the assets shortly after Russia launched its full-scale invasion of Ukraine.
Maria Zakharova, the spokeswoman for Russia’s Foreign Ministry, said in September that Moscow would respond if Europe moved to use the funds.
“We have repeatedly stated that we will respond harshly to any unfriendly actions related to any attempts to deprive Russia of ownership of its sovereign assets,” Ms. Zakharova said on Sept. 12. “We reaffirm this position.”
Russia may view the proposed European financial engineering of the loan, which would stop short of seizing the Russian assets outright, as a distinction without a difference.
In the decree issued Tuesday, Mr. Putin outlined an accelerated process to determine the market value of assets held by the Russian state within 10 days and sell them off to new owners through PSB, a state-controlled bank that finances the Russian military-industrial complex. That procedure could pave the way for quick sales of assets seized by the Russian state.
Dmitri A. Medvedev, the deputy chairman of the Russian national security council, said on Sept. 15 that Russia would pursue E.U. states and “European degenerates from Brussels” who try to confiscate Russia’s property “until the end of time” and “by every means possible.”
Russia will go after the Europeans “in all possible international and national courts” and also, “in some cases, even out of court,” he said.
How far might Russia go?
Experts say the Kremlin could pursue European assets in Russia in response. That could include so-called Type-C accounts, in which Moscow sequestered the Russian earnings of foreign entities and individuals after the West froze its sovereign assets. Foreigners can withdraw assets from Type-C accounts only with Russian government approval.
Moscow could also seize the assets and shares of foreign companies in Russia and sell them off. Since the start of the war, Moscow has taken over the operations of a number of European companies in Russia, including those of the Danish beer maker Carlsberg.
Alexander Kolyandr, a nonresident senior fellow at the Center for European Policy Analysis, said Russia could mirror the European strategy and issue a loan against the assets in the Type-C accounts to fund its crimped state budget. He said the total amount in Type-C accounts was unknown, but he estimated it to be in the low tens of billions of dollars.
Another possible step, Mr. Kolyandr said, could be an accelerated outright seizure of property or shares owned by individuals and companies from the European nations backing the loan to Ukraine. The Bell, an independent Russian online publication, has estimated that all told, hundreds of millions of dollars’ worth of Western assets could be at risk.
Mr. Putin warned in September that any European move to take Russia’s sovereign assets “would completely destroy all principles of international economic and financial activity, and would undoubtedly cause enormous harm to the entire global economy.”
In an appearance in Minsk, the Belarusian capital, in June, the Russian leader said the West’s “theft” of Russia’s reserves would only accelerate a Balkanization of global financial systems. Russia has pressed other nations to move their trade out of dollars and euros and develop payment systems immune to Western interference.
“There’s constant talk about how they’re planning to steal our money,” Mr. Putin said. “But once that happens, the movement toward regionalization of payment systems will accelerate and become, without a doubt, irreversible.”
He added, “Perhaps it’s worth paying for.”
Jeanna Smialek contributed reporting from Brussels.
Paul Sonne is an international correspondent, focusing on Russia and the varied impacts of President Vladimir V. Putin’s domestic and foreign policies, with a focus on the war against Ukraine.
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