Which of the Russian-related businesses and companies can Ukraine get, and when will the big nationalization of Russian business in Ukraine start? .
On March 3, the Verkhovna Rada adopted the law «On the main principles of the forced seizure in Ukraine of objects of property rights of the Russian Federation and its residents» No. 2116-IX, it entered into force on March 7, and the document refers to the forced seizure of objects of property rights of the Russian Federation and objects of property rights of its residents due to public necessity in favor of the state, reports the Chronicle.info with reference to Focus.
«The objects that can be seized in accordance with the law include movable and immovable property, funds, bank deposits, securities, corporate rights, other property located on the territory of Ukraine and directly or through affiliated persons belonging to the Russian Federation and its residents», — explains Oleksandr Kamsha, lawyer at Law Firm «Ilyashev & Partners».
We found out which of the businesses and companies operating in the country and associated with the Russian Federation, Ukraine can receive, and when the big nationalization of Russian property will begin.
Operation «Nationalization»: Russian business in Ukraine and the new law
According to Law No. 2116-IX, objects of property rights of the Russian Federation and its residents are subject to compulsory seizure, namely: movable and immovable property, funds, bank deposits, securities, corporate rights, other property (assets) located (registered) on territory of Ukraine, directly or through affiliated persons belonging to the Russian Federation and its residents. Lawyers note that it is not planned to select everything Russian. There is also a clear procedure for how exactly it will be determined what from Russian on the territory of Ukraine passes into state ownership.
«Such withdrawal is carried out on the grounds of public necessity (including cases in which it is required by military necessity) in favor of the state of Ukraine, on the basis and in the manner established by this law. The very procedure for such seizure is implemented through the adoption of a decision by the National Security and Defense Council of Ukraine on the forced seizure of objects of property rights in Ukraine. Such a decision is put into effect by a decree of the President of Ukraine. And importantly, the draft of such a decision will contain a list of objects of property rights of the Russian Federation and its residents (with the corresponding identification of objects and owners)», — says Igor Mlechko, partner of A.S.A. Group. He notes that the law does not stipulate that all assets belonging to the respective entities will be subject to nationalization.
«The law applies to assets owned directly or through affiliated persons by the Russian Federation and its residents. The law defines «residents» as legal entities operating in accordance with the legislation of Ukraine on the territory of Ukraine, the founder or beneficiary of which is directly or indirectly the Russian Federation», — emphasizes Oleksandr Kamsha.
Lawyers note: we are talking about legal entities, associated with the aggressor state.
«No, assets owned by citizens of the Russian Federation or private companies of the Russian Federation are not subject to seizure under this law», — says Alexander Kodolov, head of practice «Land law and real estate», partner, lawyer of JSC & #171;Assyria».
Russian assets in Ukraine: what and how much can be seized under the new law
Experts explained Focus that there are still quite a lot of assets inside the country directly or indirectly owned by the Russian Federation.
«When we analyzed these assets as part of the project on the economic footprint of Russia in Ukraine, at the beginning of 2019, we counted more than 6,700 legal entities, in whose capital at least some subjects from the Russian Federation were present. By that time, their assets amounted to about $ 11.5 billion, revenue — $ 12.8 billion, about 100 thousand personnel were involved. The largest assets are a bank, a mobile operator and some electricity distribution networks,» says Dmitry Goryunov, senior economist at the Center for Economic Strategy (CES). He says that in recent years, the economic performance of Russian companies has been gradually declining.
«Of the large assets: Russian banks mostly left (only «Alfa-Bank» remained), MTS was sold to a company from Azerbaijan, Babakov sold part of his stakes in the oblenergo to Rinat Akhmetov, and so on» , Goryunov notes.
However, there are still some large businesses in Ukraine that have a direct connection with the aggressor. In particular, we are talking about such companies as «Lisichansk Oil Investment Company», «Plant for the production of nuclear fuel», «Energomashspetsstal», «Tatneft-AZS -Ukraine». There are others. True, some are already in the process of liquidation — for example, the NBU is implementing the procedure for the liquidation of Prominvestbank and Sberbank (after renaming — the International Reserve Bank, — Ed.). Experts also call structures with Russian roots «International Consortium for the Management and Development of the Gas Transportation System of Ukraine», «Gazpromneft Lubricants Ukraine» (gas station), «Gazpromsbyt Ukraine».
Indirectly corporation «Rusal» Russian oligarch Oleg Deripaska owns the Nikolaev alumina plant, but lawyers deny the possibility of its nationalization, because it is owned by an individual — a citizen of the Russian Federation. And as the law, we recall, does not indicate that it is planned to seize property and assets from citizens of the Russian Federation.
An important question is whether the state will be able to seize and nationalize those companies that are now registered in Cypriot and other foreign legal entities. Lawyers say that according to law No. 2116-IX, such companies will also be withdrawn, the beneficiaries of which are now different offshore companies.
«Companies registered offshore will be 100% nationalized, because no one has canceled the final beneficiaries. Figureheads — if such will be known, then, most likely, too. The law deals with «affiliates», and not just about chains of corporate ties», explains Dmitry Goryunov. That is, even if Russian assets are re-registered as legal entities registered in Cyprus or Aruba, such companies can still be nationalized.
«Yes, this is possible if the assets of such companies are located (registered ) on the territory of Ukraine, and such companies directly or through affiliated persons belong to the Russian Federation, then such assets can be nationalized under this law», emphasizes Oleksandr Kodolov.
It will be state-owned: when Russian assets in Ukraine become state property < p>Experts say that in the future, after the decision of the National Security and Defense Council on nationalization and the approval of such a decision by presidential decree, the assets of the Russian Federation will be transferred to a specially created state enterprise.
«According to the law, all these assets will be transferred to a state-owned enterprise specially created for this purpose. There we are talking about «temporary or permanent basis». Apparently, after the normalization of the situation, something will be sold,” says Dmitry Goryunov. So far, there is no official information about what exactly the state plans to nationalize, although such a list, most likely, the Cabinet of Ministers has already prepared.
«The adoption of the law does not mean the automatic nationalization of any assets belonging to the Russian Federation. The list of specific objects that will be nationalized will become known only after the promulgation of the relevant decree of the President of Ukraine», said Vitaliy Chayun, lawyer, associate partner of «Radzievsky and partners».
< strong>During martial law in Ukraine, the nationalization procedure will not be launched — according to the law, the seizure of assets should take place within the time limits established in the decision of the National Security and Defense Council, but, in any case, not earlier than after the termination of martial law in Ukraine and the adoption by the Verkhovna Rada of the relevant law on approval of the NSDC decision.
Lawyers also say that the state now has other ways to control Russian assets in Ukraine, and not just nationalization approved by law.
«There are other ways to take control of Russian-owned assets. For example, in relation to the International Reserve Bank (rebranded Sberbank), the National Bank of Ukraine applied the procedure for introducing temporary administration and liquidating the bank, and the introduction of managers — in relation to & # 171; Alfa-Bank & # 187;, owned by citizens of the Russian Federation: Mikhail Fridman — 32.86 % and Petru Aven 12.4%. Since their share is not a controlling stake in ownership, sanctions relating to shareholders, as individuals, do not affect the normal operation of Alfa-Bank in Ukraine — the bank operates without restrictions», — explained Ekaterina Strukova, attorney at Stron Legal Services.
Igor Mlechko believes that in the future, changes may be made to the law that will expand the subject composition of residents of the Russian Federation (now only legal entities) and determine the criteria for affiliated entities or a specific list of such entities.
&# 171;This, according to the law, will allow seizing the property of certain categories or even specific citizens of the Russian Federation», — notes Igor Mlechko.