Confiscation of Russian property has begun in Ukraine. Thus, the state authorities confiscate 15,000 railway cars belonging to Russian state-owned companies and currently in Ukraine. The relevant law came into force in early March.
Why is this important?
First, Russian wagons can also be used to export Ukrainian grain which is traditionally done by sea, but the Russians are currently blocking Ukrainian ports.
Secondly, the confiscation of property of the Russian state is a direct compensation of the enemy and the aggressor for the damage caused to Ukraine. That is reparation in real-time.
But not only this plays a role.
One of the key reasons is the reduction of the Russian state’s influence on the Ukrainian economy.
According to economic expert Taras Kozak, this is a normal process.
– All over the world, Russian state property is illegal. And it is already working for free democratic societies. So logically we have to be in context, he says.
However, there are problems. The main thing is that the property of the Russian state in Ukraine is not so much.
In particular, in the banking sector, it is Prominvestbank, which according to a number of investigations is connected with state-owned companies of the Russian Federation, Sberbank of Russia (now called the International Reserve Bank), Gazprom Zbut, Gazpromneft Lubricants, Energomashspetsstal (a company related to Rosavto to a number of investigations) and several others.
Their assets in Ukraine are not so big. In total, they are unlikely to exceed several billion hryvnias and this is not the fact that this is their real value. And with banks in general you can go into the red.
– For example, during the closure of Sberbank, the state will have to pay its deposits to depositors and it is unknown whether any of the assets will remain for the state after that, – says Taras Kozak.
But he agrees that the banking sector will definitely have to say goodbye to the Russian component.
– The point is not that the Ukrainian state will get something from money or assets. More importantly, Russian capital through banks will not be able to influence the enterprises in Ukraine with which it works, that is, in fact, the Russian government will not be able to do so, – says Kozak.
And here comes the next very important point. The law on property directly from the Russian state can be extended to the property of Russian citizens. The reason is the influence of the Russian capital, which is in fact not in opposition to the Russian government and feeds the Russian economy.
The field for work can be wider. According to open sources, almost 17,000 companies in Ukraine (16,896 to be precise) have final beneficiaries or founders – citizens of Russia or Belarus.
By the way, Ukraine will not be the first here either. According to Western sanctions, Russian business is deprived of property abroad – houses, assets, yachts. The goal is to reduce the influence and restrict the economic freedoms of those who actually support the war against Ukraine.
In Ukraine, these companies are also not always small companies or sole proprietors. Among them are real giants. The share of these enterprises in the economy is unknown, but these are the assets that have truly become all-Ukrainian brands.
– In fact, it is done relatively simply. There is a decision on sanctions from the National Security and Defense Council, the NACP continues to work, transfers the case to the Anti-Corruption Court and it makes a decision. Everything, – says the head of the Center for Combating Corruption Vitaly Shabunin.
But there may be problems. First, cases can take years, and second, they can be challenged in international courts. For example, international courts have supported Privatbank when its assets were confiscated by Russians in Crimea. However, according to Shabunin, this is a completely different case.
– It was the Crimea! Complaints to the Russians were that they had confiscated the territory they occupied! This, of course, could not be supported! Another thing – if it is confiscation by law and court decision, – says the expert.
However, so far there is no preliminary list of possible individuals and companies to be confiscated. So how systematic the process will be is still a question.
Currently, the most important task is not to replenish the budget, which is already operating in the real sector of the Ukrainian economy but to knock out Russian capital, and therefore the Kremlin, resistance in Ukraine.