In a latest escalation in the political and economic tensions between Russia and the US, the Russian President has issued a Decree No. 442 on 23 May 2024 ("Decree") providing for retaliatory confiscation of assets linked to the US, should the US authorities "unjustifiably" deprive the Russian State or the Russian Central Bank ("RCB") of their property rights. Under the Decree, confiscation can be ordered against the assets of private parties (i.e., parties unrelated to the US government) who have committed no wrongdoing.

The measure is published as the G7 ministers negotiate a joint approach on how to best utilise around $300 billion of frozen Russian assets, or profits thereof, to support Ukraine in its efforts to defend against the full-scale invasion of Russia which has entered its third year.1 The timing of the Decree comes shortly after US legislators passed a bill that could unlock the Russian assets frozen in the US to assist Ukraine2 and just days after the EU enacted Council Regulation 2024/1469 on 21 May 2024,3 authorising the use of profits derived from the Russian assets immobilised in the EU to support Ukraine's military activities.

The Decree

Under the Decree, the Russian State and the RCB have the right to apply to Russian courts if they are subject to "unjustified" deprivation of property rights by a decision of the State or judicial authorities of the US.  Such an application has to be accompanied by an estimation of sustained losses.

If the court concludes that there were prima facie no justifiable grounds for the said deprivation of rights, it shall send a request to the Commission on Control over Foreign Investments ("Foreign Investments Commission") to provide a list of assets which can be applied (confiscated) to compensate the losses.  The Decree provides that the assets which can be used for such compensation include the assets of:

  • the US;
  • foreign persons connected to the US (including persons who are citizens or residents of the US, persons registered in the US, or persons for whom the US is the primary place of business or the country where they primarily derive their profits); or 
  • other persons under the control of the above-listed persons (notwithstanding the place of their registration), 

(collectively – "US Persons").

Upon receipt of the request, the Foreign Investments Commission shall procure that the relevant assets are identified and listed and that the pertinent information is provided to the court.  The categories of assets covered by the Decree are broad and include: 

  • real property and other tangible property located in Russia and belonging to US Persons;
  • securities and shares in Russian companies belonging to US Persons; and 
  • other property rights belonging to US Persons.

The court then determines whether the applicant has been "unjustifiably" deprived of its property rights and it may order compensation or reject the application. 

If the application is granted, the US Persons' property rights in the assets listed for compensation cease, and the assets are transferred to the applicant. 

The Decree instructs the Russian Government, within four months, to effect the necessary legislative amendments to implement the above procedures.

Key takeaways

  • The content and the timing of the Decree appear to be connected to the recent developments, most notably, in the US and the EU, aimed at applying the frozen assets belonging to Russia to provide support for Ukraine.  
  • The Decree is also very wide in scope, applying to assets not just of the US, but an extensive range of persons which may have limited connection to the US. 
  • Also noteworthy is the fact that the Decree provides for an explicitly asymmetric response, i.e., interference with the rights of Russian State entities serves as grounds for confiscation of private persons' assets. The likely logic behind this design was articulated by Dmitry Medvedev (deputy chairman of the Security Council of Russia) in April 20244 – the amount of US State assets within Russian jurisdiction does not correspond to the amount of Russian State assets frozen in the US, thus, private assets, according to Mr. Medvedev, ought to be targeted as well in order to enable an equivalent response in terms of financial value.
  • While the Decree is expansive in scope, it does not directly cover the persons connected to the so-called "unfriendly" States, which would have mirrored the scope of some of the earlier measures enacted in Russia in response to international sanctions. The Decree is focused on the assets of US Persons and the actions of the US State and judicial bodies, although the vast majority of frozen Russian assets is held in the EU. 
  • It remains to be seen how this new measure is interpreted and implemented by the Russian authorities, but it clearly creates an additional risk to the assets of US Persons which remain in Russia.  Other relevant risks have been recently highlighted in a business advisory, dated 23 February 2024, issued by the US, as reported in Part 1 of this "Russia: Investment Protection and Arbitration" series.
  • It bears noting that the text of the Decree does not require any fault or wrongful action on the part of the US Persons whose assets may be subject to confiscation.  This point may be of particular concern to the holders of the assets subject to the Decree, as there is very little scope for action to manage or mitigate the risk of confiscation. 
  • The enforcement of the Decree may also fall foul of the international standards of protection afforded to investors under various bilateral investment treaties to which Russia is a signatory, which could entitle investors to claim compensation, including by way of international arbitration proceedings. More information on investment protection mechanisms can be found in Part 1 of Mayer Brown's legal insights series, which is focused on the means of recourse available to international investors who suffered losses as a result of actions by the Russian State.

If you would like to discuss any issues raised in this Legal Alert or related topics, please contact any of the authors listed below.



1 Reuters, “G7 finance chiefs seek common line on Russian assets, China”, available at:

2 NBC News, “Congress passes bill that could unlock billions in frozen Russian assets for Ukraine”, available at:

3 Council Regulation No. 2024/1469, dated 21 May 2024, available at:

4 Reuters, “Putin decree outlines Russian response to any US seizure of frozen assets”, available at: president Dmitry Medvedev acknowledged,U.S. control could be targeted.

Stay Up To Date With Our Insights

See how we use a multidisciplinary, integrated approach to meet our clients' needs.